London, 31st October 2024 – Following the Autumn 2024 Budget, Car & Classic has spotlighted classic cars as an unexpectedly tax-efficient investment, thanks to their unique status as “wasting assets.” While Chancellor’s announcement of increased Capital Gains Tax (CGT) on assets—from 10% to 18% on the lower rate and 18% to 24% on the higher rate—will impact many traditional investments, classic cars remain a tax-free exception. As such, they present an increasingly attractive opportunity for investors and enthusiasts alike.
Under the new rules, most investments now face steeper CGT liabilities, eroding returns for those buying and selling traditional assets like stocks, shares, and properties. However, vehicles acquired for personal enjoyment, whether they be classic or contemporary, retain their categorization as wasting assets and, as such, continue to be exempt from CGT. This enduring exemption places classic cars in a rare category of appreciating assets that are not subject to the same tax implications.
“Unlike other assets, classic cars, while legally considered ‘wasting,’ often appreciate over time,” says Tom Wood, founder of Car & Classic. “Factors such as restoration, rarity, and historical significance play a substantial role in their rising values. The CGT exemption further adds to the appeal of classic cars as an alternative investment.”
For classic car owners and prospective buyers, this means that, even with potential market fluctuations, the tax-free status bolsters the long-term profitability of these vehicles. Over recent years, some models have witnessed remarkable value increases, driven by nostalgia, limited availability, and increasing popularity. This sustained appreciation combined with the recent CGT changes could encourage collectors to retain and enjoy these cars longer, knowing their investments are shielded from capital gains obligations.
To benefit from the CGT exemption, it is essential for classic cars to remain in their original “personal use” configuration. Modifications, such as tuning a car for competitive racing, can change its classification, potentially subjecting it to tax implications. This condition underscores the importance of maintaining these vehicles in their original form—a practice already common among collectors dedicated to preserving authenticity.
As classic cars gain attention as a potentially lucrative investment avenue, Car & Classic invites collectors and new enthusiasts to explore its extensive marketplace, which includes both auction and fixed-price sales of rare and sought-after vehicles. With over 30 years of expertise, Car & Classic has become Europe’s largest classic and specialist vehicle platform, trusted by collectors for its secure transactions and variety of exceptional listings.
For those seeking a tax-efficient and enjoyable investment, classic cars are emerging as a particularly compelling choice, offering not only the potential for financial appreciation but also the joy and pride of ownership. This new tax environment sets the stage for these cherished machines to attract more enthusiasts than ever, contributing to the preservation and growth of classic automotive culture.
Explore Car & Classic’s current offerings at carandclassic.com and consider the timeless allure—and tax benefits—of classic car ownership.
