CGT question

Adly812

I understand that you pay CGT on jewellery and possessions if they are sold for £6000 or more. But if I sell a necklace for £1200, would I just put that amount on my earnings, in my self assessment return ? 

It cost me £1200 and I sold it for the exact same amount three years later, so would I just add £1200 to my total income amount ? 

lr1277

If memory servies, there is a CGT form as part of the self assessment return. You put in the asset, the date bought, the cost price, the sale dat and the sale price. You maybe allowed to include transaction costs like commission when selling shares.

I say if memory serves, because I am not sure how you fill out your returns. For many years I used tax calc and the last couple of years I have used an accountant.

Some may argue that if your capital gain is less than £12k, then you don't need to complete that portion of your tax return. How you play it is up to you.

JGB1955

So.. you buy for £1,200 and sell for £1,200...I'm struggling to see where the 'gain' is.  I would only start worrying if you've sold it for more than £13,500.

Adly812

No gain on the sale , but because I have received £1200 this year having sold it, I wonder if I’m supposed to add it in as an earning... and just add that amount as part of my annual income alongside my salary ?

Jeremy535897

Adly812 said:

No gain on the sale , but because I have received £1200 this year having sold it, I wonder if I’m supposed to add it in as an earning... and just add that amount as part of my annual income alongside my salary ?

Absolutely not.

[Deleted User]

Adly812 said:

No gain on the sale , but because I have received £1200 this year having sold it, I wonder if I’m supposed to add it in as an earning... and just add that amount as part of my annual income alongside my salary ?

Never - in the same way as you didn’t deduct it from your annual income when it was purchased.

Adly812

Thank you I just wanted to make sure in case that amount looks like an earning. But yes you’re right, I never deducted the amount when I purchased it. 

Out of interest then for CGT Do you just pay CGT if you earned more than £6000 from a disposed asset ? Is that after you deduct what you paid for it ? 

Jeremy535897

See https://www.gov.uk/government/publications/chattels-and-capital-gains-tax-hs293-self-assessment-helpsheet/hs293-chattels-and-capital-gains-tax-2019

[Deleted User]

There are different rules for personal possessions or chattels. You will pay CGT if the PROCEEDS were more than 6000 and you made a gain.

The maximum chargeable gain is 5/3 of the excess over 6000. So, if you sold an item for 9000, the gain is the lower of 5000 (5/3 x 3000) or the actual gain.

Robert_McGeddon

[Deleted User] said:

There are different rules for personal possessions or chattels. You will pay CGT if the PROCEEDS were more than 6000 and you made a gain.

Doesn't any gain on chattels get included in your overall gains in the year? So if the overall gains are under £12,300 then there is no CGT to pay.....

[Deleted User]

Robert_McGeddon said:

purdyoaten2 said:

There are different rules for personal possessions or chattels. You will pay CGT if the PROCEEDS were more than 6000 and you made a gain.

Doesn't any gain on chattels get included in your overall gains in the year? So if the overall gains are under £12,300 then there is no CGT to pay.....

Yes - it does. What I explained was how to work out the gain on a chattel. On any other disposal it is simply Proceeds less costs.

Let’s say you bought a painting for 5000 and sell for 9000. The gain is the lower of 4000 (9000 -5000) or ( 5/3 * (9000 -6000) = 5000. The lower is 4000 which, if no other gains, would be covered by the 12300.

There are further rules applicable to sets.