Investment Cars
Discussion
xRIEx said:
What happens in the case of 'accidental' appreciation? Someone buys a normal car, keeps it so long it gets mega popular, all other examples of it have been scrapped so it's worth loads - doesn't have a record of what he originally paid for it so can't calculate the actual gain and therefore how much tax should be paid.
Not sure how it works in the art world but I doubt the 13th Duke of Wybourne would have records of the cost of the Gainsborough on the wall. However, the tax man will come after him if he sells it.
Guvernator said:
The Moose said:
AstonZagato said:
No idea. It's a rumour.
If I were Chancellor, I would apply CGT to all cars.
Would be totally insane...and also totally unfair!If I were Chancellor, I would apply CGT to all cars.
- Gains only (no offset of depreciation/losses).
- No indexing.
- Tax on: (Sale price - Purchase price - Restoration bills in last 18-24 months). No offset of restoration bills for a dealer.
Edited by AstonZagato on Tuesday 24th May 14:02
- No offest of depreciation/losses throughout a portfolio
- No index linking purchase price - unreasonable
- If a car was held for 10 years (say), only work that has been carried out in the last x months to be allowable expenses wouldn't be fair as part of the reason the value is where it is can be due to a comprehensive history - i.e. something with a full history of maintenance (regardless of usage) is generally more valuable than something that has nothing up until 2 years before sale
.AstonZagato said:
xRIEx said:
What happens in the case of 'accidental' appreciation? Someone buys a normal car, keeps it so long it gets mega popular, all other examples of it have been scrapped so it's worth loads - doesn't have a record of what he originally paid for it so can't calculate the actual gain and therefore how much tax should be paid.
Not sure how it works in the art world but I doubt the 13th Duke of Wybourne would have records of the cost of the Gainsborough on the wall. However, the tax man will come after him if he sells it.The Moose said:
I'm specifically referring to the following points:
.
- No offest of depreciation/losses throughout a portfolio
- No index linking purchase price - unreasonable
- If a car was held for 10 years (say), only work that has been carried out in the last x months to be allowable expenses wouldn't be fair as part of the reason the value is where it is can be due to a comprehensive history - i.e. something with a full history of maintenance (regardless of usage) is generally more valuable than something that has nothing up until 2 years before sale
.- Cars are generally depreciating assets. He doesn't want to tax those - he only wants to tax the ones going up (which are investment vehicles). Owning a fleet of new cars and offsetting the losses on that against gains in a share portfolio would cause a generally lower tax take. So it might be unfair, but then who said life is fair.
- Indexation was binned a few years ago (unfair but there you go)
- That's wear and tear for the account of the owner. He's had the benefit. Doing it up to sell it, well, that is fair to offset. Not allowing an offset for a dealer prevents them from creating mythical/astronomical costs to reduce their gain. Severely impacts the hobbyist who does it himself. But every tax has its victims.
Edited by AstonZagato on Tuesday 24th May 17:32
swisstoni said:
Despite the column inches generated on here and elsewhere, classic cars are just too small a game to be worth the bother for the taxman IMHO.
True but it might start to fall into the "something must be done" category. Press up in arms about rich people avoiding tax by investing in cars.As it is all self-assessment, there is no great infrastructure to set up - just coding the system. It would raise a trivial amount but there are plenty of people (a majority of Labour voters in a fairly recent poll) who think that you should tax top-rate earners 50% even if it raised less money than today (those people are terminally stupid).
AstonZagato said:
The Moose said:
I'm specifically referring to the following points:
.
- No offest of depreciation/losses throughout a portfolio
- No index linking purchase price - unreasonable
- If a car was held for 10 years (say), only work that has been carried out in the last x months to be allowable expenses wouldn't be fair as part of the reason the value is where it is can be due to a comprehensive history - i.e. something with a full history of maintenance (regardless of usage) is generally more valuable than something that has nothing up until 2 years before sale
.- Cars are generally depreciating assets. He doesn't want to tax those - he only wants to tax the ones going up (which are investment vehicles). Owning a fleet of new cars and offsetting the losses on that against gains in a share portfolio would cause a generally lower tax take. So it might be unfair, but then who said life is fair.
- Indexation was binned a few years ago (unfair but there you go)
- That's wear and tear for the account of the owner. He's had the benefit. Doing it up to sell it, well, that is fair to offset. Not allowing an offset for a dealer prevents them from creating mythical/astronomical costs to reduce their gain. Severely impacts the hobbyist who does it himself. But every tax has its victims.
Edited by AstonZagato on Tuesday 24th May 17:32
- That's why they're not subject to CGT. There are plenty of people out there who buy brand new cars and attempt to flip them for profit. Some succeed and make a few quid, some don't and lose a few quid. If this asset class is based on other assets liable to CGT then surely if a bet doesn't pay off then the loss should go against a gain. As you rightly say, however, life isn't fair!
- It is what it is!
- Vehicles have expenses associated with them regardless of whether they are used - even if they sit in a shed for 20 years kept in a reasonable condition with no mileage put on them, there is still a cost associated with holding that asset. I'm still unsure as to why it's fair to allow costs to do up a car for sale, but not to keep it in a reasonable condition throughout ownership.
Perhaps what would pacify PHers would be the CGT to only apply if 1,000 miles or more are covered per year?
I bought my RB5 about 5 years ago. In that time I have maintained and restored it so that it is nigh on mint (considering its a 1999 car with 78k miles). It's possibly now worth around double what I paid for it.
Unfortunately I don't use it that often as its not the sort of car to take to building sites or indeed the office. It would get wrecked in no time even just parking in carparks as it is so easily dented due to the flimsy metal panels, its also not really the car to turn up to meetings in. The mileage between m.o.t's is quite shocking.
When I do take it out though, it is glorious. Everything fully functional and its great fun to drive. Maybe no TVR or Ferrari but it still feels special everytime.
I get enjoyment in knowing that it is there, tucked up in my garage, clean and ready for a blast whenever the mood takes me. It's my toy and having posession of it is special to me. Whether anyone else thinks its a waste or not, I couldn't care less.
It's a happy side-thought that is is not just a car bought at 12 years old and soon worth next to nothing as most cars would be.
If it appreciates then so be it. I don't plan to sell it (although perhaps maybe one day) as just knowing its there to look at and drive when the urge takes me is enjoyment for me.
If people think it has to be driven until its done 200k miles and is rusty as hell to be enjoyed then thats just their opinion.
Enjoyment can also come from preservation.
Unfortunately I don't use it that often as its not the sort of car to take to building sites or indeed the office. It would get wrecked in no time even just parking in carparks as it is so easily dented due to the flimsy metal panels, its also not really the car to turn up to meetings in. The mileage between m.o.t's is quite shocking.
When I do take it out though, it is glorious. Everything fully functional and its great fun to drive. Maybe no TVR or Ferrari but it still feels special everytime.
I get enjoyment in knowing that it is there, tucked up in my garage, clean and ready for a blast whenever the mood takes me. It's my toy and having posession of it is special to me. Whether anyone else thinks its a waste or not, I couldn't care less.
It's a happy side-thought that is is not just a car bought at 12 years old and soon worth next to nothing as most cars would be.
If it appreciates then so be it. I don't plan to sell it (although perhaps maybe one day) as just knowing its there to look at and drive when the urge takes me is enjoyment for me.
If people think it has to be driven until its done 200k miles and is rusty as hell to be enjoyed then thats just their opinion.
Enjoyment can also come from preservation.
Edited by rb5er on Tuesday 24th May 22:40
A difference between cars and property in terms of CGT is surely the ease with which a car can be moved around between countries. I've no idea how it works for art or jewelry but the car which are bought as investments and fall easily within the CGT boundaries are likely to be owned by people with property in more than one country. How would the tax be calculated for someone who bought a car in the UK, kept it here for a year then "exported" it to their home in a country with no CGT on cars and sold it two months later?
Leins said:
^^^ If they were tax resident in the UK they would still be liable
Conversely, I'm based in Ireland so if I bought a car in England and brought it home, then sold it back to someone in England a year later for twice the price I still wouldn't be liable for any CGT in the UK
Thanks for the clarification. I'm sure many of the speculators could easily register a car with an offshore facility to keep it out of the UK tax system, however.Conversely, I'm based in Ireland so if I bought a car in England and brought it home, then sold it back to someone in England a year later for twice the price I still wouldn't be liable for any CGT in the UK
Driverless cars doesn't have much to do with it unless driven cars become illegal to use on the roads.
The one consistent thing that doom-mongers get wrong is that new technology wipes out old. People still read books, go to the cinema, listen to the radio. Vinyl as we know, is making a comeback. Antiques are as popular as ever, as are Georgian houses.
Purely mechanical cars will one day be revered as mechanical works of art, much like high-end watches today. It's now accepted that a Steinway piano is a more glorious thing than a Yamaha keyboard, despite only being able to make one sound. The more electronic things become the more we will marvel at the purely mechanical way of doing things. Mechanical watches are worth vast amounts more than electronic ones. The Apple watch has done nothing to change this. We're already way past the point of being able to enjoy the full potential of a fast car on the roads. Race tracks will be busy and more will be built. Hopefully the UK will have its own Nordschleife one day.
The zenith of the analogue, mechanical car is, I believe, the McLaren F1 and look at the values of those. Far outstripping La Ferrari and the hybrids and will continue to do so.
But this is far into the future. The great strides taken by car makers to dumb down their fast cars so that anyone can drive them is only helping to fuel the increase in older, more communicative cars - 997 GT3RS being an obvious recent beneficiary of the auto-only 991 GT3. E46 M3 CSL values have rocketed while there are great deals to be had on brand new M4s. If Porsche and others start getting serious about listening to their customers this might change.
The one consistent thing that doom-mongers get wrong is that new technology wipes out old. People still read books, go to the cinema, listen to the radio. Vinyl as we know, is making a comeback. Antiques are as popular as ever, as are Georgian houses.
Purely mechanical cars will one day be revered as mechanical works of art, much like high-end watches today. It's now accepted that a Steinway piano is a more glorious thing than a Yamaha keyboard, despite only being able to make one sound. The more electronic things become the more we will marvel at the purely mechanical way of doing things. Mechanical watches are worth vast amounts more than electronic ones. The Apple watch has done nothing to change this. We're already way past the point of being able to enjoy the full potential of a fast car on the roads. Race tracks will be busy and more will be built. Hopefully the UK will have its own Nordschleife one day.
The zenith of the analogue, mechanical car is, I believe, the McLaren F1 and look at the values of those. Far outstripping La Ferrari and the hybrids and will continue to do so.
But this is far into the future. The great strides taken by car makers to dumb down their fast cars so that anyone can drive them is only helping to fuel the increase in older, more communicative cars - 997 GT3RS being an obvious recent beneficiary of the auto-only 991 GT3. E46 M3 CSL values have rocketed while there are great deals to be had on brand new M4s. If Porsche and others start getting serious about listening to their customers this might change.
twinturban said:
- 997 GT3RS being an obvious recent beneficiary of the auto-only 991 GT3. If Porsche and others start getting serious about listening to their customers this might change.
The 4.0 997 GT3RS £350k+ prices in particular have largely been fuelled by very limited numbers....only 28 UK cars.......not so much the auto/manual 991 GT3 which itself is still commanding a c£25k premium for 2-3 year old cars.Porsche have clearly been listening to its enthusiast customers with the manual GT4 and 981 Spyder....nice mix of analogue and digital with a similar ethos to the 911 R.
Don t forget that Porsche deliberately underprice their restricted run halo and GT cars as a branding exercise that filters down the vanilla range. This is having the desired effects and more with rapidly increasing 250k+ units per year. The large premiums on most niche cars are the obvious result.
There would have been more 4.0 GT3RS if UK buyers wanted them at the time.
'Increasing the bandwidth' as Porsche like to call it does bring in new buyers I never claimed the dumbed down cars would be unpopular. Only that those seeking a more involving analogue experience would be more inclined towards a 997. The 997 had no such positive effect on 996 values.
Porsche's limited run flirting with manual-only 911R is just them dicking about with their customers and it's annoying far more than it delights. All this engineered waiting list nonsense is actually driving some away.
I'm talking about Porsche listening to their customers properly and rebuild their range around them. If they do that they will find a way to put a flat 6 back in a Boxster and ditch the electric steering, just like they do on their Le Mans race cars.
'Increasing the bandwidth' as Porsche like to call it does bring in new buyers I never claimed the dumbed down cars would be unpopular. Only that those seeking a more involving analogue experience would be more inclined towards a 997. The 997 had no such positive effect on 996 values.
Porsche's limited run flirting with manual-only 911R is just them dicking about with their customers and it's annoying far more than it delights. All this engineered waiting list nonsense is actually driving some away.
I'm talking about Porsche listening to their customers properly and rebuild their range around them. If they do that they will find a way to put a flat 6 back in a Boxster and ditch the electric steering, just like they do on their Le Mans race cars.
twinturban said:
dumbed down cars.
I'm talking about Porsche listening to their customers properly and rebuild their range around them. If they do that they will find a way to put a flat 6 back in a Boxster .
You clearly haven t driven a 991 GT3 if you think it is 'dumbed down'. Far more usable than the archaic 997 and entirely suited to the fantastic PDK S gearbox which is viewed by many as superior to the superb 458 transmission.I'm talking about Porsche listening to their customers properly and rebuild their range around them. If they do that they will find a way to put a flat 6 back in a Boxster .
As for the flat six....many including me mourn the passing of this engine but Porsche clearly had no choice other than to go flat four turbo on their vanilla 718 Caysters as they did EPAS due to emissions. For now, the GT cars will remain high revving naspirated until the next gen hybrids follow the gen 2 GT3 etc which incidentally will have a manual option gearbox from the R.
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