The Department for Transport (DfT) states that cars 40 years and older no longer have to undergo their annual roadworthiness check, known to most as an MOT. Prior to the rule change, only vehicles built or first registered before 1960 were MOT exempt, which accounted for almost 200,000 cars on the road at the time.
Instead, you have to wait for the first day of April, and then as long as your car was registered 40 years before the first of January you can apply for road tax exemption from April.
A reduced VAT rate of 5% applies to the importation of qualifying classic cars. Classic cars are for VAT purposes defined as cars at least 30 years old. HMRC also allow the reduced import rate for a car not more than 30 years old where it is: extremely rare.
You do not need to get an MOT if: the vehicle was built or first registered more than 40 years ago. no 'substantial changes' have been made to the vehicle in the last 30 years, for example replacing the chassis, body, axles or engine to change the way the vehicle works.
Movable assets such as classic cars can be gifted to family members, if no benefit is retained or lent, or for a period each year, to a car museum to avoid paying inheritance tax on death.
Urgent Update for Classic Car Owners: Could UK Tax Exemption Changes be in the Pipeline? 😲
Do you pay capital gains tax on classic cars?
Classic cars are mechanical assets with a limited life and therefore come with some tax exemptions and reliefs for owners. Where a car appreciates in value any gains realised are non-taxable.
If a classic car is gifted to a family member, no liability to CGT should arise provided the individual is not considered to be trading and provided the donor survives seven years after making the gift, it will be fully exempt from IHT.
The measure extends the exemption from Vehicle Excise Duty (VED) to vehicles constructed 40 or more years ago on an automatic rolling basis on 1 April each year. The VED exemption is intended to support classic vehicle, which the Government considers are an important part of the nation's historical heritage.
Classic cars are not being banned, but it's likely the next few decades will see a shift that may eventually present a challenge for classic car drivers. This includes increased availability of electric car charging points and decreased space at fuel stations for traditional petrol and diesel pumps.
To apply for free road tax and classic vehicle MOT exemption from 1 April, you must be able to prove your vehicle's road tax exemption age – that it was built more than 40 years before 1 January of that year.
Currently, a vehicle "first registered" on/prior to 7 January 1983, will be classed by the DVLA as having been built in 1982, therefore it is tax exempt from 1 April 2023. If your vehicle was 'first registered' after this date, up to 31 December 1983, you will need to wait until 1 April 2024.
Tax exempt cars. There is more than one route to having a zero-VED-rated car, with electric cars, cars with low CO2 emissions, historic cars and cars used by someone with a disability all exempt – assuming certain criteria are met.
Yes, usually. Most classic car insurance providers assume that the owner of a classic car will treat it like a commodity. It's expected that a classic car will be driven less than a regular car, and that care and attention will keep it safe.
If you do not know your vehicle's build date, but it was registered over 40 years ago, you are eligible to apply for tax exemption. Every April 1st, the threshold changes to include vehicles built before January 1st (or registered before 8th January) 40 years prior to the present year.
Is my vehicle exempt from tax? Vehicles manufactured before 1 January 1979 are exempt from vehicle tax. Additional exemptions apply to some electric and disabled passenger vehicles. A full list of vehicles exempt from vehicle tax is available from the DVLA.
For example, if your car was built before 1st January 1982, you were legally exempt from paying vehicle tax after 1st April 2022. In short, any car that's aged 40 years or older is considered to be a classic car, or in official terms, a 'historic vehicle'.
In all likelihood, what will happen to classic cars after 2030 instead is that they will become increasingly expensive to run as petrol and diesel usage dwindles and prices for combustion fuels skyrocket. That will make running a classic car even more of a luxury than it already is.
At the moment there is no suggestion that classic cars powered by traditional petrol or diesel engines will be forced off the road. There are more than half a million “historic” vehicles — those over 40 years old — on British roads and it is unlikely that will change.
A vintage car is one that was manufactured between 1919 and 1930. An antique car is any car manufactured in 1975 or earlier (older than 45 years old). The classic car is a vehicle manufactured in the 1990s or earlier (at least 20 years old).
“This tax class excludes any vehicle used commercially (for example, coffee vans or street food vans). “In line with the existing LEZ discount all vehicles constructed before 1 January 1973 will be exempt from the ULEZ, regardless of commercial use or otherwise.
While some cars are obviously classics – essentially anything over 40 years of age – newer, 'modern' classics are more difficult to define. The age criteria insurers use normally ranges between 15 and 25 years old. It is possible to obtain classic car insurance from mainstream providers, alongside specialist insurers.
Some enthusiasts think classic cars have timeless design, technological or nostalgic value, and embrace the idea of modern classics. But if you're using car tax exemption as a cut-off point, then any car that's aged 40 or older is a classic – even if it's not very desirable.
So whilst classic cars can be excellent investments that sometimes can produce decent returns, the answer is no, you shouldn't cash in your pension and run out and buy one. We see the changes to pension legislation as highly positive and pensions have now become more flexible than ever before.
Most cars are exempt from Capital Gains Tax (CGT), even classics. Why? Simply because they are deemed 'wasting assets' with a lifespan of under 50 years.
