Section EE 3 — Income Tax Act 2007: Ownership of goods subject to reservation of title

EE 3 Ownership of goods subject to reservation of title When this section applies (1) This section applies when— (a) a person (the buyer ) enters into an unconditional contract to buy an item of depreciable property; and (b) the contract is not a hire purchase agreement and the item is not a hire purchase asset that is the subject of a hire purchase agreement; and (c) the contract is subject to the Sale of Goods Act 1908 ; and (d) title to the item does not pass until the purchase price is paid in full; and (e) the buyer takes possession of the item before title to it passes. Buyer treated as owner (2) The buyer is treated as owning, and the seller is treated as not owning, the item from the later of the following times: (a) the time at which the buyer enters into the contract; and (b) the time at which the buyer takes possession of the item. Buyer ceases to be treated as owner (3) Subsection (2) ceases to apply when 1 of the following occurs: (a) title to the item passes to the buyer; or (b) the seller repossesses the item. Defined in this Act: depreciable property , hire purchase agreement , hire purchase asset , own , Compare: 2004 No 35 s EE 3