Capital gains tax explained Capital gains tax and possessions
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..
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