Capital gains tax explained Capital gains tax and possessions

Yacht

Some chattels escape capital gains tax

Valuable possessions such as antiques and collectibles are called 'chattels' in tax-speak. Any profit you make from selling certain types of possessions is tax-free; items with a predicted life of 50 years or less, known as 'wasting assets', are CGT-free, provided they were not eligible for business capital allowances. Antique clocks and vintage cars are treated as 'wasting assets', and so are pleasure boats and caravans.    

If your gain is not tax-free, capital gains tax is charged in a special way. You taxable gain is the lower of the actual gain or five thirds (166%) of the excess of the final value over £6,000.

For example, if you sell a pair of antique candlesticks for £7,000 which you originally bought for £5,000, the actual gain is £7,000 - £5,000 = £2,000. The gain under the special rules is 5/3 x (£7,000 - £6,000) = £1,666. Since this is lower, your taxable gain is £1,666..

More on this...

Last updated:

April 2016

Updated by:

Ian Robinson

 

Which? Limited (registered in England and Wales number 00677665) is an Introducer Appointed Representative of Which? Financial Services Limited (registered in England and Wales number 07239342). Which? Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited. Registered office: 2 Marylebone Road, London NW1 4DF.