At Attwoods we can advise businesses on the disposal of chattels, and potential Capital Gains Tax liabilities. Here are some of the issues that you may need to consider...
The term 'chattel' refers to an item of tangible movable property. It would therefore include:
It does not apply to:
There is no taxable gain if the proceeds do not exceed £6,000 (joint owners each have a £6,000 limit). Where the proceeds exceed £6,000 but are not more than £15,000, use the steps shown below:
|Antique table - proceeds of sale||£9,250|
|Incidental costs of sale||£350||£2,350|
|Now calculate the maximum chargeable gain|
|Excess proceeds over £6,000 (£9,250 - £6,000)||£3,250|
|Multiply this by 5/3||£5,417|
This is the maximum chargeable gain. Compare this with the actual gain, and use the lower figure, which is £5,417.
If the proceeds are more than £15,000 calculate the chargeable gain in the normal way.
In accordance with normal principles, a gift is treated as a disposal at open market value at the date of the gift, and so it will be advisable to obtain relevant valuations.
A set is a number of chattels that are:
Disposal of assets in a set are treated as separate disposals unless they are sold to the same person or persons who are connected. In such a case the £6,000 limit applies to all of the set collectively and not to each item individually.
Even if the disposal proceeds of chattels exceeds the £6,000 exemption level, there may not be any tax to pay because the gain, together with all other gains, may be covered wholly or partially by the CGT annual exemption (£12,300 for 2020/21).
In the normal way, investment in chattels is not usually subject to income tax. However, a sequence of gains on disposal may lead to the conclusion that they are being held for trading purposes rather than investment.
Collectors' coins may be liable to VAT at the standard rate. However, coins classified as 'investment gold' are exempt from VAT and do not qualify for inclusion in the VAT second-hand schemes.
If you are looking for professional advice on disposal of chattels or general business matters, contact Attwoods.