Certain chattels are always treated as wasting assets, such as plant or machinery. A gain or loss on a disposal of a wasting chattel is exempt from capital gains tax unless capital allowances have or could have been claimed on the asset.
Useful life is determined at the date of acquisition, having regard to the purpose for which the chattel was obtained. A chattel which is wasting will be exempt from capital gains tax and any losses on it will not be allowable.
Any personal goods other than “money, securities for money or property used solely or mainly for business purposes” falls into the definition of chattels.
You don't have to pay Capital Gains Tax on personal possessions with a lifespan of less than 50 years. This covers all machinery, and includes things like antique clocks or watches. Different rules apply if you've used the possession for business.
Capital Gains Tax on CHATTELS - the £6,000 rules all in LESS THAN 10 MINUTES!
How much personal stuff can you sell before paying tax?
You may have to pay Capital Gains Tax if you make a profit ('gain') when you sell (or 'dispose of') a personal possession for £6,000 or more. Possessions you may need to pay tax on include: jewellery.
Only occasional sales with a total value under £1000 per year are free from tax. Regular selling (even if it's used items) falls under conducting trade (you have to register). Selling anything you bought to resell with the intention of making a profit is conducting a trade (you have to register).
A wasting chattel is a chattel with a useful life not exceeding 50 years. Useful life is determined at the date of acquisition, having regard to the purpose for which the chattel was obtained. A chattel which is wasting will be exempt from capital gains tax and any losses on it will not be allowable.
How should belongings and other assets be valued? To determine how much the chattels belonging to an estate are worth, they will need to be valued. This should equate to what the open market value would be at the time of the deceased's death, as opposed to an insurance or replacement value.
Chattels are items of personal property, i.e.assets that are identifiable and movable. Fixtures have been installed in or fixed to the property, therefore becoming part of the building.
A gain or loss on a disposal of a wasting chattel is exempt from capital gains tax unless capital allowances have or could have been claimed on the asset. Capital gains tax also applies if a chattel with a predictable life of more than 50 years is loaned to a business which uses it as plant.
What are wasting chattels? Wasting chattels (WCs) are those with a predictable life of 50 years or less. Examples include washing machines, televisions, radios, caravans and yachts. In addition, antique watches and clocks and vintage motor-cycles (despite a predictable life in excess of 50 years) are treated as WCs.
In the context of estates of deceased persons who have died intestate on or after 1 October 2014, personal chattels is defined as tangible movable property but not: Money or securities for money.
If part of the home is used exclusively for business, you may have to pay tax on part of the gain. And letting out some or all of your home can also mean a capital gains tax bill. If you live in a caravan or houseboat, there's normally no capital gains tax to pay on it, even if it is not your only or main home.
The monetary value of chattels can well amount to a tidy sum, resulting in a substantial Inheritance Tax (IHT) liability at 40% in the absence of an exempt gift to a surviving spouse/civil partner.
Title to chattels (e.g. jewellery, paintings, pens, etc.) may pass by simple delivery (i.e. by literally handing the chattel over), without the need for probate.
In these circumstances, HMRC is likely to check to ensure the deceased properly declared all their income and gains in their lifetime. In addition, HMRC may already be conducting enquiries into the deceased's personal tax position, for example if they used a tax avoidance arrangement during their lifetime.
However, vehicles are machinery which means they are a wasting asset under TCGA92/S44(1)(c). The disposal of a chattel (tangible moveable property) which is a wasting asset may be exempt under TCGA92/S45(1), see CG76721.
What is the difference between an asset and a chattel?
The term 'chattel' means tangible moveable property, ie assets that can be seen, touched and moved. Examples of chattels include paintings, antiques, racehorses and computers. Assets such as buildings, land, leases or shares are not chattels because they cannot be seen, touched and moved.
You do not pay Capital Gains Tax on certain assets, including any gains you make from: ISAs or PEPs. UK government gilts and Premium Bonds. betting, lottery or pools winnings.
If you sell your old clothes or other household items online, it's unlikely that this will constitute a taxable transaction, but if you undertake a commercial venture with a view to making a profit (e.g. buying stock to resell at a profit), this is likely to be considered trading and tax liabilities may arise.
This was proposed in July 2023, with an annoncement that the regulations will apply from 1 January 2024, with reporting due from January 2025. See HMRC reporting-rules-for-digital-platforms .
Ok, eBay tax isn't a thing in the eyes of HMRC. That said, the tax implications of selling on eBay are very much real. The more you sell on eBay, the more it will appear to HMRC that you are doing so to make a profit. And if profits are the goal, this needs to be declared.
