[UK] What are the consequences of transferring ownership (not selling) a vehicle on tax, licensing and future resale value?
Many cities in the UK won't sell more than one parking permit per person. I didn't realise this when buying a second car and now need to transfer one of them into my wife's name (who uses one of the cars exclusively anyway) so that I can have the "honour" of parking outside overnight on a public road.
According to the DVLA (Department for Vehicle Licensing), there are no costs for transferring the "registered keeper" to another, however, this will increase the number of "former keepers".
Will I have to get a new tax certificate for the vehicle, or will the old one (six months to run) still be valid?
Will there be a capital gain or other tax liability on me for the transfer? i.e. will it be perceived as a gift or a sale?
Does increasing the number of "former keepers" have an impact on the resale value of the vehicle?
Are there any other tax gotchas I should be aware of?
This is a problem that may affect, for instance, a parent sending their offspring to university with the family car and also transferring ownership so that they can park. I want to be sure that, in order to spend £40 on parking, I don't incur hundreds of pounds in tax liabilities.
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Given that the V5C lists the previous owner, it's pretty easy to prove that you transferred the car to your wife so it shouldn't affect the resale value when your wife comes to sell the car. And as Ganesh already mentioned, the tax disk is valid no matter how often ownership gets transferred.
Under the rules in-force at the time this question was asked the old tax certificate would ll continue, it was the vehicle that's registered and they were often sold with tax still to run. Unfortunately this is no longer the case and under the new system you will end up paying twice for the month in which the car is transferred.
There's no capital gain or other tax liability, for two reasons: firstly the registered keeper doesn't have to be the same as the legal owner so you can retain ownership, and secondly transfers to and from your wife can be made without any tax consequences anyway - once it's sold on then the reference point is the price you paid originally. A car is unlikely to experience a capital gain anyway.
A large number of "former keepers" can be a red flag that the car has been mistreated, but generally a single extra one shouldn't make much difference and you can mitigate it by explaining the situation to the next owner.
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