13 replies to this topic

[mab01uk]

Front page of Classic Car Weekly this week is suggesting Capital Gains Tax is being considered for classic cars in the UK (they are currently classified as 'wasting assets' - items classed as having a normal predictable life of less than 50 years - exempt from CGT. These apparently include old clocks and watches, racehorses and most fine wine).
Such a move would of course affect values of many cars including higher value Mini's where they are bought and stored away purely as a tax free investment......
http://www.classicca...kly.co.uk/home/

Edited by mab01uk, 23 September 2016 - 01:02 PM.

[Ethel]

...and why not, if they are being bought as investments? If they're really a depreciating asset then your capital won't gain and you won't have any tax to pay. It could be a good thing for the scene if it gives the government a vested interest in it, though I suspect there are more around Whitehall with a vested interest in reducing their tax bill.

[Archived2]

How would this affect the average joe on the street.. If at all?

[nicklouse]

I wonder if you could offset maintenance/restoration costs against tax....

[mini-geek]

Bloody government just taxing money that's already been taxed! Look at the bigger picture of all the people involved with supporting the industry!

[Ethel]

They aren't, you only pay CGT on what profit you make. Buy a Mini for 10k, flog it for 15k and you're only taxed on the 5k. Then you're not taxed on your first 11k (annual allowance) and you're only taxed at 18%, you might even get it down to 10%. That's a bit better than working for a living.

[Cooperman]

If one bought, say, a 1275 'S' in need of total restoration for £5000 and spent £10000 on restoration, the the cost would be deemed to be £15000. Now say you kept it for 2 years then sold it for £30000. Your capital gain over 2 years would be £15000 so no CGT would be due as £7500 gain per annum is well within the personal limit. Unless, of course, you had lots of other capital gains during the same period.
It won't be a problem.

[CMXCVIII]

It is inevitable that HMRC will get interested when they can read adverts from brokers who are inviting investors to join their syndicates and own - but obviously never drive - old Ferraris and the like!

 

Jon 

[mab01uk]

Back in 2010.....Chris Evans beats taxman with a Ferrari

"It was the use of a Capital Gains Tax (CGT) concession that helped Radio 2 DJ Chris Evans avoid paying tax when he splashed out £12m on a rare 1963 Ferrari 250 GTO.

Chris a car enthusiast helped fund the purchase by selling other Classic cars from his collection. He did not have to pay tax on the profit from those sales."

https://lmaccountant...with-a-ferrari/

Edited by mab01uk, 24 September 2016 - 05:01 PM.

[Scousemouse]

Just seen on the news last night that all cars built pre 1977 are to be reclassed as  CLASSIC...so no MOT req

Makes you wonder what's behind the Governments thinking??

[Cooperman]

Just seen on the news last night that all cars built pre 1977 are to be reclassed as  CLASSIC...so no MOT req

Makes you wonder what's behind the Governments thinking??

 

All that has happened is that there is a consultative period until November during which time the possibility of altering the age at which an MoT test will be required is to be considered.

If you read the document the reasoning will become clear.

[gazza82]

Consultation documents here ...

 

https://www.gov.uk/g...storic-interest

 

 

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Edited by gazza82, 29 September 2016 - 04:14 PM.

[Sam]

Bloody government just taxing money that's already been taxed! Look at the bigger picture of all the people involved with supporting the industry!

 

Not just classics but people are making serious money from flipping cars and it's all tax free. New 911 R is circa £140k to buy and these are selling for £400k+.. Same with GT3RS, people have been making £100k with zero effort. Surely the gov are going to want a slice of this but it would be very difficult to implement.

[Cooperman]

We are all required to declare all our income including any capital gains.

Cars for personal use and homes (but not rental properties you own) are excluded from CGT. If you are making a business of buying and selling cars or anything else and a profit is made, then that must be declared.

It is the speculation in otherwise tax free cars which is being considered, as it probably should be. It really won't affect true enthusiasts for classic cars as the CGT allowance will more than cover the gains made, unless, say, you buy a really rare and valuable classic (say an E-Type) as a barn find, do a small amount of work and sell it on for a fortune at which point CGT will be liable on anything you have made over your personal allowances and cash spent on restoration.

It it unfair? I think not.