Oxfordshire 01235 280 540
Wickford 01268 761 939

CGT selling an Olympic torch

6th July 2012

CGT selling an Olympic torch

HMRC have issued a timely, Olympic themed, reminder of the Capital Gains Tax (CGT) rules relating to the sale of assets. A charge to CGT usually arises after an asset is sold. There are special rules concerning the sale of chattels. Chattel is a legal term which defines an article of movable personal property. Chattels with a predictable useful life of 50 years or less are normally exempt from CGT. Gains on other chattels are exempt if proceeds do not exceed £6,000 per item and marginal relief may be available where the proceeds are between £6,000 and £15,000.

The reminder from HMRC specifically relates to the sale of Olympic torches by members of the public. The sale of an Olympic torch for more than £6,000 may be subject to CGT depending on the sale price and the amount of any other gains during the tax year.

UK residents are allowed to make a certain amount of tax free capital gains each year. This ‘annual exempt amount’ is currently (2012/13) £10,600 for individuals and £5,300 for trusts. CGT is usually charged at a simple flat rate of 28% and this applies to most chargeable gains made by individuals. Taxpayers that only pay basic rate tax and make a small capital gain may only be subject to CGT at the rate of 18%. If the total of taxable income and gains exceeds the higher rate threshold, the excess will be subject to 28% CGT.