Taxation of Chargeable Gains Act 1992 section 263

Passenger vehicles

Section 263 exempts most passenger vehicles from capital gains tax, so that neither a gain nor a loss arises when they are disposed of.

• A mechanically propelled road vehicle constructed or adapted for carrying passengers is not a chargeable asset for capital gains tax purposes.
• No chargeable gain or allowable loss arises on the disposal of such a vehicle.
• The exemption does not apply to a vehicle of a type not commonly used as a private vehicle and unsuitable for such use — for example, certain specialist or commercial vehicles may still be chargeable assets.
• Although a vehicle such as a taxi is itself exempt, any separate asset associated with it — such as a taxi licence — remains a chargeable asset and may give rise to a gain or loss on disposal.