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Client buys a classic car as investment

Client (limited company) has bought a classic car as an "investment".

What is the correct treatment? Should I show it as an "investment" or just another motor vehicle?

What would be the tax treatment?

My gut instinct is to treat it as "other" investments and not to clain any CA etc....and on a yearly basis, carry out an "desktop" valuation by checking prices of similar classic cars on the internet....am I thinking alsong the right lines or have I missed something?

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14th May 2012 18:34

No ideas anyone?

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By cfield
14th May 2012 19:08

Company car rules

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).

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