Tax on an antique ... help plz

Arjy

Okay not even sure where to start on this. I have a valuable anitique that's been in my house for a good thirty years, that my father collected years ago. I've recently had it valued at over £30,000 and am contemplating selling it. I've had a few enquiries over on Ebay.

Where would i stand on the tax issues? Any info would be welcome.

antrobus

You may well have to pay Capital Gains Tax on any profit you make on the sale of the antique. The profit will be the difference between what you can sell it for, and what it cost you in the first place. It's the latter that I expect will be the issue as it's been hanging around the house for "a good thirty years". So the question would be, how and when did you come into possession of this antique? Did you father give it to you? Did you inherit it from your father? If so, what value was placed on it on the probate documents? Etc.

patman99

Why bother telling the Taxman. HMRC are really not interested if something sells for more than was originally paid for unless it was purchased with the sole intention of re-selling for profit.

If you did speak to HMRC, then the conversation would probably go something like this -

Arjy - "Hi, I just sold an old antique that I inherited 30-odd years ago for £30k+, how much tax do I need to pay?"

HMRC - "As you have had the item 30 years, then you did not buy it to sell-on, so no tax is owed."

Arjy

It cost my father nothing, as it was given to him by a celebrity who has now passed away.

I'm also self employed, so that's why it's important i have to declare it.

How do i calculate capital gains tax? What percent of the price do i have to pay? I can't find this information on the gov website, it just tells you what is taxed. Does this just on your usual tax returns, or is it some seperate thing?

ceeforcat

antrobus is only correct up to a point - this item would be regarded as a chattel and there are special rules for Capital Gains on these.


I suspect that your Capital Gain will be as follows:

Gain is £30000 less the value at the time of your father's death.

Let's say £10000.

Gain = £20000.

However, with marginal relief, this is restricted to:

5/3 (30000 -6000) = 5/3 times 24000 = 40000.

£20000 is lower and this is your gain before annual exemption.

Deduct your exemption and your Capital Gains bill is either £9400 at 18% if a basic rate taxpayer, or 9400 at 28% if higher rate. Sell now and this would be payable on 31st January 2013.

sleepless_saver

This page on the HMRC website has the detail on how to calculate the amount due.

Don't know if it applies in your case, but you can be exempt from CGT if the item had an expected useful life of less than 50 years when you got it, and also has not been used in your trade or business.

John_Pierpoint

You have a tax free allowance of the first 10,600 of gains in any one year.
I wonder if you could make a declaration of trust and hold half of its value as bare trustee for your spouse or legal partner?
(Thus getting two 10,600 shares)

Perhaps a friendly local dealer can give you a 1982 valuation if the item did not feature in dad's subsequent(?) probate account.;)

antrobus

patman99 wrote: »

Why bother telling the Taxman. HMRC are really not interested if something sells for more than was originally paid for unless it was purchased with the sole intention of re-selling for profit.

Well that's just plain wrong. We're talking about Capital Gains Tax here not Income Tax.

ceeforcat wrote: »

antrobus is only correct up to a point

Guilty as charged. But then I was trying to gently introduce the OP to the delights of CGT.

Arjy wrote: »

It cost my father nothing, as it was given to him by a celebrity who has now passed away.

It's important to establish when exactly you became the owner. Even if it cost your father nothing, a value may have been placed on the antique when probate was applied for, and so it might have cost you something. And if your father just gave it to you, the cost would be the market value at that time. (I think that's right.) And different rules can apply if you owned owned the asset on the 31st March 1982, or if you acquired the asset between 1982 and 1998.

Arjy wrote: »

How do i calculate capital gains tax? What percent of the price do i have to pay? I can't find this information on the gov website, it just tells you what is taxed.

As noted above you have an annual CGT allowance of £10,600 and you only pay tax on the gain in excess of that amount. Tax is payable at either 18% or 28% if you're a higher rate taxpayer.

Arjy wrote: »

Does this just on your usual tax returns, or is it some seperate thing?

It goes on your usual tax return. If you're still doing paper returns, you'll need to ask your tax office to send you the extra CGT pages. Or you can download and print them from the HMRC website. If you do online returns then there'll be some box you have to tick, or something like that, which prompts you to pump the numbers in. (Sorry, wasn't paying attention last time I did mine.)

John_Pierpoint

antrobus wrote: »

As noted above you have an annual CGT allowance of £10,600 and you only pay tax on the gain in excess of that amount. Tax is payable at either 18% or 28% if you're a higher rate taxpayer.

Or a mixture of both as the capital gains pushes some of your tax into the higher rate - something that relatively poor pensioners learn the hard way, when they are forced to sell the holiday home they acquired in richer times.