Benefit in kind on classic cars

 

 

Benefit in kind on classic cars

 

Normal benefit in kind rules on cars apply a percentage based on CO2 emissions to the car’s list price; the tax is then calculated at the taxpayers prevailing tax rate.  This can mean that benefit in kind tax on cars with high CO2 emissions can be high, particularly for higher rate taxpayers.

Different rules apply to “classic cars”.  For tax purposes a car over 15 years old with a current market value greater than its list price meets HMRC’s “classic car” criteria.  Instead of the normal benefit in kind percentages based on CO2 emissions, the following percentages apply to classic cars:

• 0 to 1,400cc – 15%
• 1,401 to 2,000cc – 22%
• Over 2,000cc – 32%

Whether the percentage is applied to the list price of the vehicle when new or the current market value depends on its current market value.  If the market value exceeds £15,000 then the percentage is applied to the current market value.  If the market value is £15,000 or less then the percentage is applied to the list price of the car when new.

 

So if you’ve always dreamed of owning a classic car and would like to
discuss the tax implications then give us a call.

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