Neil - Since your swmbo is an accountant she will no doubt know that the list of collectibles (formerly fine art, wine etc) that benefit from Capital Gains Tax exemption has been greatly reduced.

However, a qualifying 'Wasting Asset' still benefits from CGT exemption of gains on disposal - including cars and other mechanical items such as guns, watches, clocks, steam engines etc. In short, man toys which meet the HMRC definition of 'a machine which can be expected to have a working life of less than fifty years'.

Of course, rather than irreversibly declining in value as a function of time, many categories of wasting asset have done exactly the opposite in recent years as poor returns from traditional and highly-taxed asset classes have prompted investors to look at non-traditional asset classes which, for the time-being, also look to be fairly tax-effective. Witness classic cars, watches etc - all rising in value.

So here's your answer - it's a tax mitigation AND asset diversification strategy. My wife bought this story when I came home and told her I'd bought a traction engine (made my Aeromax look cheap...)




Stuart
"There's no skill substitute like cubic inches."