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Starting a Limited Company with Existing Stock (Items)
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Richard_Richard
Posts: 3 Newbie

I have a large Lego collection that I've built up over several years as a hobby and have been selling some of it piece-meal. However I want sell the majority of it in the next 12 months or so to help pay down our mortgage. Currently I estimate I have about £30-40k worth at resale value.
As I work fulltime and am close to the 40% tax bracket I've been told I might be best off starting a Ltd Company as it works out better from a tax perspective.
Tax would only be paid on profit and I should be able to write off the existing cost of the Lego. However as I've been collecting this on and off for years now, how do I prove the value of the existing stock I have? I have proof for some but quite a lot was bought from family & friends, friends of friends, Facebook Marketplace etc. Some was eBay or Lego themselves but between 1-5 years ago and I don't have receipts etc.
Does anyone know how to deal with this? If you're planning on selling a large amount of personal items you're going to have to pay tax on it but how do you prove what you paid for it in the first place if you've not kept records as it was originally a hobby?
As I work fulltime and am close to the 40% tax bracket I've been told I might be best off starting a Ltd Company as it works out better from a tax perspective.
Tax would only be paid on profit and I should be able to write off the existing cost of the Lego. However as I've been collecting this on and off for years now, how do I prove the value of the existing stock I have? I have proof for some but quite a lot was bought from family & friends, friends of friends, Facebook Marketplace etc. Some was eBay or Lego themselves but between 1-5 years ago and I don't have receipts etc.
Does anyone know how to deal with this? If you're planning on selling a large amount of personal items you're going to have to pay tax on it but how do you prove what you paid for it in the first place if you've not kept records as it was originally a hobby?
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Comments
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Selling a personal collection you have built up over the years is not trading and not subject to income tax, but it may very well be subject to CGT. Do you have a ball park figure on how much you have spent over the years?1
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