Do I have to pay taxes when I sell my car?

Question

I am planning to sell my car - do I have to pay any taxes when selling the car to a private buyer or car dealer? Thanks.

Asked by Clemens

Answer

You don’t have to pay any taxes when you sell a private car.

Even in the unlikely event that you sell your private car for more than you paid for it, special HM Revenue and Customs rules mean that you don’t pay Capital Gains Tax.

Some owners will apply for a refund of any remaining Vehicle Excise Duty (car tax) on the vehicle though this is usually factored into the deal as part of the value of the car. From October this year everything changes though. DVLA will no longer issue tax discs (but cars will still have to be taxed) and will cancel the balance of tax when notified of a change of keeper. The old keeper will receive a refund and the new keeper will have to apply for car tax immediately.

Answered by Edmund King AA President [06/2014]