The nine-year-old only returned last month after being off since February 2012, and caused a minor surprise by landing the three-mile Grade One race.
An 8-1 chance, trained by Philip Fenton, Last Instalment powered home in the hands of Brian O'Connell.
Grand National entry Tidal Bay stayed on to claim second place.
Bookmakers reacted to the victory by cutting Last Instalment's Gold Cup odds to about 10-1 from 40s, behind Bobs Worth, Silviniaco Conti and Cue Card.
Fenton said: "The ground would be a concern in the Gold Cup as there's a big chance it would dry up. We'd be happy to see rainfall.
"I'm hoping there's still a pinch of improvement to come. It's happy times."
Favourite First Lieutenant, in the same Gigginstown House Stud colours and the choice of retained jockey Bryan Cooper, tried to challenge the long-time leader.
But Last Instalment galloped on to score by eight and a half lengths from the 13-year-old Tidal Bay, with First Lieutenant in third.