Classic car investment(s)

[benjj]

I was speaking to a chap earlier who had a tidy classic. After we had talked about the car he said that as he owned his own business he was able to make it tax efficient in some way.

I own my own (limited) company.

I like classic cars.

I have a little bit of cash I could tie up.

Can anyone explain what options are oipen to me?

Thanks.

[Hyper10]

I think some people "invest" via a SIPP, Trustee's will sometimes accept a proportion of the SIPP in unusual investments. I never bothered as it throws up lots of issues re usage and legitimacy.

[Eric Mc]

He might be talking about the variations in Capital Allowances and benefit In Kind rules that apply to some classic cars.

[benjj]

Interesting, thanks chaps.

I've already got a 'classic' that I own personally worth about 35k, was also wondering if there was a way to sell it to my firm as an asset on the books. Guess a chat with my accountant is due.

Cheers.

[johnnyreggae]

If you only have one classic as your company perk road car it can be tax efficient provided it is not too valuable and needs maintaining - pay for you own petrol and the company pays for everything else - competition use gets more complex as running costs can be disallowed and other considerations come into play

[jonah35]

jumping on the back of this how would it work for say a contractor with a ltd company.

could he use an e30 m3 as a daily paid for by the retained profits in the company tax efficiently. obviously he wouldn't get say an e90 m3 due to company car tax.

is this worthwhile?

[Eric Mc]

Why would a contractor limited company be any different to a non-contractor limited company?

The only way to find out whether the BIK on a company car is going to be crippling or not is to do the number cruching.

There are a few websites out there that will work the calculations for you.

[jonah35]

Eric Mc said:

Why would a contractor limited company be any different to a non-contractor limited company?

The only way to find out whether the BIK on a company car is going to be crippling or not is to do the number cruching.

There are a few websites out there that will work the calculations for you.

i presume it wouldn't eric.

ok thanks

[nckr55]

Just FYI - I was wondering something fairly similar myself recently (our old Focus could do with replacing, and I've been looking at 944s...)

I found this note on the web, that needs more investigation but sounds promising:

"I would just treat it as a fixed asset like any other car. Even classic cars don't go up that much unless it is a particularly rare model.

One thing you should watch is the tax rules for classic cars. If the market value is more than £15,000 at the end of the current tax year, you have to calculate the BIK on its market value, not its notional value. Obviously this will be a lot higher.

Incidentally, if the market value is less than £15,000 it's a very good way of minimising company car tax, as then you can base it on notional value (which would be the original cost if there was no official List Price).

You can also use a fixed percentage based on engine size if there was no offcial figure for CO2 emissions when it was first registered. This would be fixed, not go up every year like the percentages for modern cars.

There is a good article on this by Tax Cafe in their latest bulletin (Business Tax saver)."