{"id":20618,"date":"2023-10-09T17:18:01","date_gmt":"2023-10-09T16:18:01","guid":{"rendered":"https:\/\/taxfix.com\/en-uk\/?p=20618"},"modified":"2024-01-29T18:04:06","modified_gmt":"2024-01-29T18:04:06","slug":"is-selling-a-car-taxable-income-uk","status":"publish","type":"post","link":"https:\/\/taxfix.com\/en-uk\/investor-capital-gains-tax-returns\/is-selling-a-car-taxable-income-uk\/","title":{"rendered":"Is selling a car taxable income (UK)?"},"content":{"rendered":"\n<p>Want to get rid of your car but wondering if selling a car is taxable income in the UK? Let\u2019s discuss the tax implications when selling your vehicle!<\/p>\n\n\n\n<p>To understand whether you will be met with a tax bill after selling up, first, you have to understand <a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/capital-gains-tax-cgt\/\" target=\"_blank\" rel=\"noreferrer noopener\">Capital Gains Tax<\/a> (CGT).&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">What is Capital Gains Tax?<\/h2>\n\n\n\n<p>CGT is a tax on the profit you make when you sell an asset &#8211; a possession that is considered to have value. The first \u00a33,000 won\u2019t be taxed as it is within your <a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/capital-gains-tax-allowance\/\" target=\"_blank\" rel=\"noreferrer noopener\">capital gains allowance<\/a> in the 2024\/25 tax year (previously \u00a36,000 in the 23\/24 tax year).<\/p>\n\n\n\n<p>Watch our short video for an explanation of Capital Gains Tax in just ten seconds!<\/p>\n\n\n\n<figure class=\"wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio\"><div class=\"wp-block-embed__wrapper\">\n<div class=\"embed-container\"><iframe loading=\"lazy\" title=\"Tax in 10(ish) seconds - what is Capital Gains Tax?\" width=\"500\" height=\"281\" src=\"https:\/\/www.youtube.com\/embed\/ZUdtnBFew8o?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share\" referrerpolicy=\"strict-origin-when-cross-origin\" allowfullscreen><\/iframe><\/div>\n<\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\">Do cars count as assets?<\/h2>\n\n\n\n<p>Cars are indeed assets, but they don\u2019t fall into the same category as fancy pearls or acres of land. HMRC categorises cars as \u2018<a href=\"https:\/\/www.gov.uk\/hmrc-internal-manuals\/capital-gains-manual\/cg76700\" target=\"_blank\" rel=\"noreferrer noopener\">wasting assets<\/a>\u2019 with a lifespan of fewer than 50 years &#8211; pretty savage, right?&nbsp;<\/p>\n\n\n\n<p>Even if you opt to put this statement to the test and keep your motor for longer than 50 years, your car will still be exempt from CGT.<\/p>\n\n\n\n<p>Other types of wasting assets include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Furniture &#8211; yes, even crushed velvet<\/li>\n\n\n\n<li>Machines such as computers<\/li>\n\n\n\n<li>Selected natural resources such as oil, coal and natural gas<\/li>\n<\/ul>\n\n\n<\/div> <!-- .c-body -->\n\n<div class=\"b-highlight-mini m-yellow m-align-left\">\n    <div class=\"b-block-body\">\n        <p><span style=\"font-weight: 400;\">\ud83d\udea8 Major Alert \ud83d\udea8<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Although cars are considered wasting assets, if you routinely buy and sell cars with the intention of making a surplus, this can be classed as trading under the <\/span><a href=\"https:\/\/www.gov.uk\/corporation-tax\"><span style=\"font-weight: 400;\">Corporation Tax Act 2010<\/span><\/a><span style=\"font-weight: 400;\">. You will be taxed on this income. In order for a car to be exempt from CGT, it must be solely for personal use.<\/span><\/p>\n\n    <\/div>\n<\/div> <!-- .b-highlight-mini -->\n\n<div class=\"c-body\">\n\n\n\n\n<h2 class=\"wp-block-heading\">Can I claim allowable losses on the sale of my car?<\/h2>\n\n\n\n<p>Normal cars are more likely to depreciate rather than increase in value, so you can\u2019t claim allowable losses or any tax relief when selling your vehicle. You can only claim allowable losses on <strong>chargeable assets<\/strong> &#8211; this includes:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Property which is not your main residence<\/li>\n\n\n\n<li>Shares which are not in a tax-free investment or scheme<\/li>\n\n\n\n<li>Personal possessions worth over \u00a33,000 &#8211; i.e jewellery, paintings and antiques<\/li>\n\n\n\n<li>Business assets &#8211; i.e lump sums of cash and stocks<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Is selling a classic car taxable income in the UK?<\/h2>\n\n\n\n<p>Surprisingly, classic cars do not attract CGT &#8211; this is because they are <em>still<\/em> considered wasting assets, and not taxable income in the UK. This isn\u2019t to say that classic cars cannot be a great investment!&nbsp;<\/p>\n\n\n<\/div> <!-- .c-body -->\n\n<div class=\"b-highlight-mini m-blue m-align-left\">\n    <div class=\"b-block-body\">\n        <h3>Example:<\/h3>\n<p>Benjamin bought his Volvo P1800 over a decade ago. Today, it is worth \u00a337,000, a whopping 84% increase since 2010. Although Benjamin will make a great profit from his vehicle, he will not have to pay Capital Gains Tax. Lucky Benjamin!<\/p>\n\n    <\/div>\n<\/div> <!-- .b-highlight-mini -->\n\n<div class=\"c-body\">\n\n\n\n\n<h2 class=\"wp-block-heading\">Are <em>all <\/em>vehicles exempt from Capital Gains Tax?<\/h2>\n\n\n\n<p>Not exactly. You will have to pay capital gains tax when selling the following vehicles:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Vans and lorries<\/li>\n\n\n\n<li>Motorcycles<\/li>\n\n\n\n<li>Scooters<\/li>\n\n\n\n<li>Single-seat sports cars<\/li>\n\n\n\n<li>Racing cars (sorry Lewis Hamilton)<\/li>\n\n\n\n<li>Taxi cabs<\/li>\n<\/ul>\n\n\n\n<p>But remember, you only pay capital gains tax on <a href=\"https:\/\/taxfix.com\/en-uk\/glossary\/profit\/\" target=\"_blank\" rel=\"noreferrer noopener\">profit<\/a> over<strong> \u00a33,000<\/strong> (in the 24\/25 tax year), so unless your scooter is carved from gold, don&#8217;t worry too much!<\/p>\n\n\n\n<p>We hope we\u2019ve done a decent job at thoroughly answering one of our most commonly asked questions &#8211;<em>Is selling a car taxable income UK?<\/em> But we get it&#8217;s not always that simple!<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Need a helping \ud83d\udc4b<\/h2>\n\n\n\n<p>If you\u2019re still not 100% on whether you have to pay Capital Gains Tax or simply need advice regarding any other type of tax, we offer one-off tax advice from accredited accountants who are committed to making your taxes plain sailing.&nbsp;<\/p>\n\n\n\n<p>Learn more about our tax advice service <a href=\"https:\/\/taxfix.com\/en-uk\/tax-advice\/\" target=\"_blank\" rel=\"noreferrer noopener\">here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Want to get rid of your car but wondering if selling a car is taxable income in the UK? Let\u2019s discuss the tax implications when selling your vehicle! To understand whether you will be met with a tax bill after selling up, first, you have to understand Capital Gains Tax (CGT).&nbsp; What is Capital Gains [&hellip;]<\/p>\n","protected":false},"author":30,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[458,462],"tags":[70,102,418],"class_list":["post-20618","post","type-post","status-publish","format-standard","hentry","category-investor-capital-gains-tax-returns","category-tax-efficiency","tag-capital-gains-tax","tag-hmrc","tag-invest"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.8 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Is selling a car taxable income (UK)? &#8211; Taxfix<\/title>\n<meta name=\"description\" content=\"Thinking of getting rid of your motor but not quite sure if selling a car is taxable income (UK)? 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