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Just spoken to the DVLA about this and I've been assured that the V5C will merely replace a V5 as far as the SORN standing is concerned. They're not interested in a SORN declaration for any car that's been off the road since before 1998.
So that's a small relief, seeing as they are now trying to charge admin fees every year you declare an unchanged SORN status, which is as stealthy a tax as I've ever seen.
Whether this procedure differs when a vehicle changes hands as in Bluebottle's case I'm not sure, but for Redshoes' MG and my Mercedes, it's "as you were" just with a new registration document.
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