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Chapter DMBM655240

Document Cited in Related
Vincent
Published date29 April 2016
Record NumberDMBM655240
CourtHM Revenue & Customs
IssuerHM Revenue & Customs
Types of financial agreements

There are various types of financial agreements relating to goods. You will be able to tell the nature of the agreement by the description on the documents.

If the debtor claims that third parties have a financial interest in the goods and there are insufficient other goods to satisfy the debt, ask to see a copy of the agreement.

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Conditional sale and hire purchase (HP) agreements

HP and conditional sale agreements are very similar. A conditional sale agreement means that, as long as the purchaser complies with its terms, ownership will pass to them once the final instalment is paid.

HP agreements differ slightly in that ownership does not normally pass to the buyer unless and until buyers take out an option to purchase the goods and the final payment has been made. Although some HP agreements allow the buyer to dispose of the asset before the final instalment is paid, ownership and title has not passed to the buyer until the final payment has been made.

If you were to seize and sell goods subject to HP, HMRC could be liable to the civil offence (tort) of conversion so it is practice not to seize goods subject to HP.

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