What would my tax position be if I were to sell my classic car which was purchased as an investment?

Unlike normal motor cars, classic or vintage cars do not necessarily depreciate and might enjoy a significant increase in value during their period of ownership. This kind of purchase can be a great investment but there are sometimes tax implications in doing so. Our Accountants Bolton can help you calculate the tax implications.

More recently the holding of classic cars has become attractive not just for the enjoyment of their ownership but also as an alternative form of investment.

Another key advantage is that unlike other forms of investment such as stocks & shares and investment properties, they generally don’t attract capital gains tax if you enjoy a profit upon their disposal.  The reason for this is that for capital gains tax purposes they are regarded as a ‘wasting asset’ with an estimated use for life of less than 50 years.  Even if they remain in existence for a period in excess of 50 years the same wasting asset treatment applies.

This can be attractive in considering ones overall capital tax position in comparison with other investments which may attract capital gains tax at 20% or even 28% in some circumstances. On the other hand whilst any gain is not chargeable to tax if you were to lose money on such an investment any capital losses arising are not eligible for relief.

Other matters to consider include the cost of maintenance and insurance etc and care should be taken that such cars are held for investment purposes.  If you buy and sell cars too frequently HMRC may regard you as trading and tax any profit as income.

If you’d like advice on this matter, please don’t hesitate to contact our Accountants Bolton on 01201 534 031 or contact us via our enquiry form.

 


This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.

DID YOU FIND THIS USEFUL?

Share it with your network:  

Want more great content?
Sign up to our newsletter

Follow us

Tweets by @CHW-accounting

CHW-Accounting
@chw-accounting


Twitter: chw_accounting

Read enough?

Want to find out how we can help you and your business? Get in touch today and let's have a chat.

WHAT'S THE NEWS?

Grab a biscuit and a brew and read our latest news.

4 July 2019

VAT Reverse Charge

by

With a major shake-up in the treatment of VAT in respect of building work is imminent – our Senior VAT Manager, Carolyn Van Hecke, highlights the implications for those in the construction industry and why it has never been so important to apply the correct VAT treatment.


Read more >

20 May 2019

How long must I retain my books and records?

by

HM Revenue and Customs ( HMRC ) may check your records to make sure you’re paying the right amount of tax, but how far can they go back & how long should you keep business records?


Read more >

12 April 2019

Claiming back VAT on a vehicle purchase

by

You can usually reclaim the VAT paid on goods purchased for use in your business. However, with vehicles these often include an element of personal or private use. We explain the rules regarding reclaiming VAT on vehicle purchases.


Read more >

1 April 2019

Loans to employees – what you need to know

by

Whilst a business is perfectly entitled to loan money to employees or relatives, there can be tax implications if it does.  Here’s our brief reminder of those implications.


Read more >

28 March 2019

Guide to Payroll Changes from April 2019

by

If you are an employer there are several payroll changes which come into effect from April 2019 of which you should be aware.


Read more >

YOUR CHALLENGES

No matter what your challenge is, we’ve probably dealt with it before.



Need an Accountant?

Get in touch >


Need an Accountant?

Get in touch >


Tax issues?

Find out more >


Tax issues?

Find out more >


Trying to grow your business?

We can help >


Trying to grow your business?

We can help >


Managing cashflow?

We can help >


Managing cashflow?

We can help >


Starting a business?

We can help >


Starting a business?

We can help >


Looking for funding?

Need help with funding? >


Looking for funding?

Need help with funding? >


Buying or selling a business?

We can help >


Buying or selling a business?

We can help >


Adopt the cloud?

We can help >


Adopt the cloud?

We can help >


What else can we do for you?

We can help >


What else can we do for you?

We can help >
CONTACT US

Get in touch, no hard sell, just a brew, a biscuit and a chat.