Rented or leased goods
Source: gov.uk (2025-06-25)

Information about rented or leased goods.

Treatment of rented or leased goods

Hire or leasing transactions do not constitute a sale even if the agreement includes an option to purchase at a later date (WCO AO 1.1). It is not possible to determine the value of rented or leased goods using valuation Method 1, and Methods 2 to 6 should be used in order. In most cases, the most appropriate Method to use will be Method 6.

How to arrive at the customs value

It may be possible to use valuation Methods 2 or 3 if identical or similar purchased goods have been imported to the United Kingdom at the time of, or within a reasonable time period of, the importation of the chargeable goods into the United Kingdom. Similarly, it may be possible to apply valuation Method 4 if identical or similar goods are sold in the UK within 90 days of the import of the leased or rented goods. If not, the importer must then try to establish a value under Method 5.

Valuation Method 6

Once all the other valuation Methods are exhausted, it will be appropriate to use Method 6 by applying with reasonable flexibility to Methods 1 to 5, maintaining the prescribed order where possible and having consideration of the principles adopted in the CVA (as per Regulation 126 (b) CIDEER (https://www.legislation.gov.uk/uksi/2018/1248/regulation/126/made)).

If no valuation can be determined with flexible application of Methods 1 to 5, a valuation can be determined using other reasonable Methods. These must not be precluded by article 7 of the Agreement and/or the general provisions of Article VII GATT (as per WCO AO 12.1.).

Valuation could proceed on the basis of the rental charges paid or payable for the imported goods, aggregate rental expectations during the economic life of the goods may serve as a basis. Care needs to be taken when assessing the proposed rental charges. In rare cases valuation may be determined through the use of price lists, or the opinion of an expert if acceptable to customs and the importer.

Calculating the valuation using Method 6

It is possible to calculate the value of rented or leased goods under Method 6.

To do this the importer would multiply the annual rental or leasing cost by the expected economic life of the imported goods. It may be impractical to determine the lifetime of a good, often in industries where the rate of change in technology is rapid. It may be useful to use experience of the life of identical or similar goods, but in most cases consulting with experts will be necessary.

Where the rental or leasing cost includes interest, it is necessary to calculate the ‘cash’ price of the goods. This is done by using a formula. There are 2 formulae which can be used, depending on whether the payment is made in advance or arrears. The following examples demonstrate each of the 2 formulae.

Case study 1 - yearly hire charge when paying in advance

Read Case study to work out the cash price to include in the customs value when paying in advance (https://assets.publishing.service.gov.uk/media/6841558d8dd459f8c947b45e/Case_study_to_work_out_the_cash_price_to_include_in_the_customs_value_when_paying_in_advance.odt) for the calculation showing the importer how to work out the ‘cash’ price to include in the customs value when they pay in advance.

Case study 2 - yearly hire charge (including maintenance and other expenses)

Read Case study to work out the cash price to include in the customs value when paying in arrears (https://assets.publishing.service.gov.uk/media/684156711d85c6606009cd8e/Case_study_to_work_out_the_cash_price_to_include_in_the_customs_value_when_paying_in_arrears.odt) for the calculation showing the importer how to work out the ‘cash’ price to include in the customs value when they pay in arrears.