They’re a pretty popular, unique and trending way to personalise your vehicle on one hand – but did you know that personalised private number plates are also sometimes highly prized by investors? Here, we’ll look into the benefits and drawbacks of investing in private number plates.
What makes a plate valuable?
There are all sorts of factors that might make one private number plate a more attractive prospect to an investor. The value often comes from how unique or rare the plate might be – for example, it might have a really meaningful combination of letters, initials or numbers, that perhaps spell out a trending word or a common name. A stand-out plate, for example, a simplistic plate such as ‘VIP 1’, might command a higher value than a generic mix of letters and numbers.
Considering tax
If you’re looking at investing in personalised plates, don’t forget to comply with your tax obligations. High-value plates are considered to be intangible assets. That means that although you can turn a profit when you sell a high-value plate, your profit could be subject to capital gains tax, or if it’s a plate you’ve inherited as a result of a bereavement, it could be treated as part of the estate for inheritance tax purposes. Working closely with Stroud accountants, such as randall-payne.co.uk/services/accountancy/stroud-accountants, can help you comply with tax responsibilities.
Running a business
If you’re a business owner who’s thinking about purchasing a private plate for your company car, you could make the most of VAT benefits, as long as the plate is being used for business purposes, for example, promoting your company. Then, you might be able to reclaim VAT on this expense, although HMRC may scrutinise this to be sure the vehicle is being used for clear business purposes.
A good investment?
As with any investment, private number plates can generate plenty of profit if you’re experienced and have a knack for selecting a plate that might increase in value – but it’s important to remember that profit isn’t a guarantee and there’s always a risk.
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