Selling Second Hand Car - Profit Taxable?

[Nutso]

Hi All,

I recently purchased a second hand car. I got it for a good price as it needed a little bit of work done to it. I have since had the work completed and put the car through the NCT. However, the car is no longer suitable for my needs due to a change in family circumstances. If I sell this car at a profit, is the profit taxable?

Thanks,
Nuts

 

[Protocol]

No, unless you are a car dealer who trades in cars.

 

[mathepac]

Not IMHO. Just as you cannot claim a tax write-off or credit on a loss, you need not declare a "profit".

 

[bullworth]

Not IMHO. Just as you cannot claim a tax write-off or credit on a loss, you need not declare a "profit".

Does this also apply to someone who might have brought a car into the country in such a way as to have avoided VRT legally ? e.g having owned the car for a year abroad ?

 

[Nutso]

Thanks for the responses - this is likely to be a once-off, I plan to get it right next time! Good to know that I can put the "profit" into a new car without having to worry about tax on it.

 

[mathepac]

Does this also apply to someone who might have brought a car into the country in such a way as to have avoided VRT legally ? e.g having owned the car for a year abroad ?

As I understand it, if the VRT is legally avoided through prior ownership of the vehicle abroad, there is a time restriction on reselling the vehicle in the State; it must be kept by the importer for at least a year from date of import AFAIK, otherwise the VRT etc become due.

 

[bullworth]

As I understand it, if the VRT is legally avoided through prior ownership of the vehicle abroad, there is a time restriction on reselling the vehicle in the State; it must be kept by the importer for at least a year from date of import AFAIK, otherwise the VRT etc become due.

but once this is done and all laws are complied with... if there still remains a very significant profit ... does cgt or income tax apply ?

 

[STEINER]

Hi All,

I recently purchased a second hand car. I got it for a good price as it needed a little bit of work done to it. I have since had the work completed and put the car through the NCT. However, the car is no longer suitable for my needs due to a change in family circumstances. If I sell this car at a profit, is the profit taxable?

Thanks,
Nuts

you are selling the car as it is no longer suitable for you and you will just buy a better car, not primarily for profit, no CGT or IT issues. However if you were to to go down the road and buy and resell a few cars in quick succession, Revenue would claim you are engaging in trade. This would be assessable to Income Tax.

 

[mandelbrot]

but once this is done and all laws are complied with... if there still remains a very significant profit ... does cgt or income tax apply ?

Neither.

Unless you were carrying on a trade then Income tax can't apply.

A car is a wasting chattel, and therefore exempt from any charge to CGT.

The reality is that there are very few possible scenarios where the situation you've outlined would be likely to realise a substantial gain, given the rules about length of ownership etc...