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Find out more'I'm selling some old possessions, do I have to pay tax?'
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I’m selling a number of personal possessions, including a set of silver cutlery.
Will I have to pay tax on the money I make?
A Which? Money reader
'Think hard when setting prices'
Mike Croxford, Which? Money expert, says…
Let's start with the good news: you don’t need to worry about income tax, as this only applies if you’re trading – in other words, buying items with the intent to sell them at a profit.
The bad news? You might have to pay capital gains tax, which is charged at 18% or 24%, depending on your income and size of gain (i.e. profit).
This can apply to the sale of personal items – or ‘chattels’ as HMRC terms them – if you were to sell an item for more than £6,000 and make a gain of more than £3,000 (the annual tax-free capital gains allowance).
Even if you make overall profits far above £3,000, if the individual items sold for less than £6,000 each, then you're in the clear.
'You might be caught out by your silver cutlery set'
However, you might be caught out by your silver cutlery set.
Although you could argue that one spoon is unlikely to fetch £6,000, where the item being sold is a set, then the £6,000 limit applies to its entirety. A set can be loosely defined as being worth more when it’s sold together rather than separately.
You can report gains on a self-assessment tax return or by contacting HMRC.
If you expect to exceed the above limits, consider spreading sales out over several tax years, so you can benefit from several annual tax-free allowances.
- Find out more: Capital gains tax rates and allowances
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