Profit made on private car sales
Discussion
I always runs two.... a 'fun' car and a 'sensible' car, and generally seem to change them roughly in pairs (if you see what I mean!). I generally change every 6-9 months, so "get through" a few!
Anyway, two of them I've bought in the £15-20k bracket with 'issues' (mechanical and/or bodywork), and sold them with a combined profit of about £7k. I owned one for 7 months and one for 9 months - registered to me at my home address. Profit was then part of the spend on my next car purchase.
....to the question! Should that profit be taxable, or is it exempt (capital gains?!). If so, would it class as income and be taxed as per my tax band?
Anyway, two of them I've bought in the £15-20k bracket with 'issues' (mechanical and/or bodywork), and sold them with a combined profit of about £7k. I owned one for 7 months and one for 9 months - registered to me at my home address. Profit was then part of the spend on my next car purchase.
....to the question! Should that profit be taxable, or is it exempt (capital gains?!). If so, would it class as income and be taxed as per my tax band?
Edited by johnnyBv8 on Thursday 9th August 08:18
Cars bought for private use only and subsequently sold on are not taxable transactions.
Typical taxable possessions
Personal possessions that may be liable to Capital Gains Tax when you sell or dispose of them include:
jewellery
paintings
antiques
coins and stamps
These are examples of assets that you can physically touch and move, ie they're tangible and moveable, and special rules apply.
The special rules mean that you don't pay Capital Gains Tax on:
Your private car
Personal possessions that are individually worth £6,000 or less at the time you sell or otherwise dispose of them. This covers many household articles such as fridges and sofas. But there are slightly different rules for assets that form part of a set - see the section on 'sets of possessions' below.
Most personal possessions that are 'wasting assets' - these are assets with a limited lifespan that often lose their value over time. See the section on 'wasting assets' below.
Typical taxable possessions
Personal possessions that may be liable to Capital Gains Tax when you sell or dispose of them include:
jewellery
paintings
antiques
coins and stamps
These are examples of assets that you can physically touch and move, ie they're tangible and moveable, and special rules apply.
The special rules mean that you don't pay Capital Gains Tax on:
Your private car
Personal possessions that are individually worth £6,000 or less at the time you sell or otherwise dispose of them. This covers many household articles such as fridges and sofas. But there are slightly different rules for assets that form part of a set - see the section on 'sets of possessions' below.
Most personal possessions that are 'wasting assets' - these are assets with a limited lifespan that often lose their value over time. See the section on 'wasting assets' below.
True - unless the OP is seen to be operating a "trade" in which case he would be.
Much depends on the motive of the OP when buying the cars (is he looking to make a turn?) and whether HMRC ever become aware of the number of cars the OP goes through.
If the OP's SOLE motive is to enjoy the cars, then no problem - not taxable.
David
Much depends on the motive of the OP when buying the cars (is he looking to make a turn?) and whether HMRC ever become aware of the number of cars the OP goes through.
If the OP's SOLE motive is to enjoy the cars, then no problem - not taxable.
David
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