Inheritance Tax on Classic Cars

Do you know how Inheritance Tax on classic cars works?

To many a car enthusiast, a classic car is priceless and for tax purposes there are some useful exemptions for Capital Gains Tax (CGT) purposes where the car involved is considered to be a wasting asset.

H M Revenue & Customs have confirmed that if the vehicle is one the following then it will be charged to CGT, but if it is not included within the list then it will not be:

• Taxi cabs
• Racing cars
• Single seat sport cars
• Vans, lorries or other commercial vehicles

This can make the ownership of a classic cars an attractive tax-efficient investment, however are they exempt from Inheritance Tax (IHT)?

No! All motor vehicles (including classic cars) are chargeable to IHT and are therefore chargeable just like any other asset and will be taxed accordingly!

Current IHT rates of 40% on the market value at the date of death is a large cost. Subject of course to the value of the overall estate and reliefs available.

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