Tax advice of the week: Buy 'wasting assets'
Dec 11, 2009
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A few weeks ago we listed assets that were exempt from capital gains tax (CGT). One group – 'wasting assets' – has been attracting particular interest.
According to Valerie Elliott in The Times, auction houses dealing in sporting guns, antique clocks and classic cars are reporting "brisk activity" as consumers seek "safe havens" that also provide enjoyment.
To be recognised as a 'wasting asset' by HMRC, the item must have a predicted lifespan of 50 years or less. The list of "tax-exempt machinery" includes vintage cars, guns, watches, barometers and other scientific instruments, model railways and some antique toys. If these items are resold or passed on to your heirs, they are free from CGT, currently 18%.
Auctioneer Gavin Gardiner says pairs of guns made by Purdey, Holland & Holland or Boss are in great demand. Meanwhile, a sale of classic cars by Bonhams in Harrogate last month achieved a 92% record for lots that reached their reserve price or above. Competition for antique clocks is also fierce. On 15 December, Bonhams will be offering a 1705 Thomas Tompion bracket clock with an estimated reserve of £250,000.
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