I am thinking of starting a business partnership with a friend…

Hi

Thanks for your response

The difficulty here is whether this can constitute a trade or not, and HMRC may argue that this is not trade (so you cannot be a sole trader of partnership)

If you plan to buy further classical cars and restore them - then HMRC may look upon this more favourably, and allow this to operate as a trade, but you would need to get agreement from them in writing that this is the way you can take things forward.

However - the complexities are then you putting your own vehicles into the "business" and this is where a capital gain will arise. As you are disposing of these cars as a personal asset and making them a business asset and then what has to be considered is whether you bought this cars with the intention of restoring them and selling them on. As you do not have all the receipts this does not seem likely for all the cars.

You are best just restoring the cars as you have been and declaring the gain that will arise - and if you do this along with your friend, then you will split the gain 50/50 but you need to make sure that you take legal advice how the gains should be split (as you seem to be putting up the cars, and you may be best just paying him for the work he perhaps will undertake.

OR not introduce any of the cars you currently own but start to buy cars that need restoration from the off. Then HMRC will accept this is a trade, and you can enter a partnership.

Thanks

Sam