License Plate Tax Information
It's important to note that license plates are not exempt from Capital Gains Tax. According to HMRC's Capital Gains Manual (CG76923):
"The sale of the right to display a particular vehicle registration mark is a disposal for Capital Gains Tax purposes."
This means that if you sell a license plate for more than you paid for it, you may be liable to pay Capital Gains Tax on the profit. It's advisable to keep records of purchase and sale prices, as well as any associated costs, to accurately calculate any potential capital gain.
For more detailed information, please refer to the HMRC Capital Gains Manual.
The VAT treatment of license plates depends on how the transaction is structured:
- No VAT: If you purchase a license plate but do not take delivery of the paperwork (V778), and the plate is held indefinitely by PlateXchange, the transaction is not subject to VAT.
- VAT Applicable: If you choose to take delivery of the paperwork for the plate (with the intention of attaching it to a vehicle), VAT will be charged on the transaction.
Please note that if PlateXchange holds the V778 on your behalf, there may be administration fees if the V778 needs renewing.
It's always recommended to consult with a tax professional or HMRC directly for advice on your specific situation, as tax laws and their interpretations can change over time.