Over the last few days, almost everyone has had their say on the Autumn 2024 Budget. While, from what I’ve seen anyway, opinion has mostly been negative, there is some good news for us classic car enthusiasts and owners.
Despite the announced increase in Capital Gains Tax (CGT) from 10% to 18% at the lower end and from 18% to 24% at the higher end, which impacts most traditional investments, classic cars are considered “wasting assets” making them exempt from this increase.
As a general rule, cars are considered to be items with a lifespan of less than 50 years (wasting assets) and are therefore not subject to Capital Gains Tax. We all know that some classic cars will actually increase in value over time but, as far as the government are concerned, they remain exempt.
It is worth noting though that not all classic cars will qualify for exemption. As long as your classic is kept in its original form for personal use, CGT won’t be an issue. However, if you have modified it for a different use e.g. racing, the tax status of your vehicle may change.
For now, at least, classic cars look to be a sensible investment in terms of emotion and passion as well as a potential financial investment which I, for one, am very happy about.
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