Work out your gain
Your gain is usually the difference between what you paid for your personal possession and what you sold it for.
Use the market value instead if:
- it was a gift (there are different rules if it was to your spouse, civil partner or a charity)
- you sold it for less than it was worth to help the buyer
- you inherited it (and don’t know the Inheritance Tax value)
- you owned it before April 1982
You can deduct certain costs of buying, selling or improving your personal possession from your gain.
Costs you can deduct include:
- fees, eg for valuing or advertising
- costs to improve your possession (but not repairs)
- VAT (unless you can reclaim it)
You can’t deduct certain costs, including:
- interest on a loan to buy your possession
- costs you can claim as expenses, if you’ve used your possession for business
Contact HM Revenue and Customs (HMRC) if you’re not sure whether you can deduct a certain cost.
If you sold it for between £6,000 and £15,000
You may be able to reduce your gain if you got between £6,000 and £15,000 for your possession when you sold or disposed of it.
Subtract £6,000 from the amount you’ve received.
Multiply this by 1.667.
Compare this with the actual gain - use the lower amount as your capital gain.
Work out if you need to pay
When you know your gain, you can work out if you need to report and pay Capital Gains Tax.
If you’ve used your possession for business, you can reduce or delay the tax you pay if you’re eligible for tax relief.
Reporting a loss
The rules are different if you need to report a loss.
You can claim losses for possessions sold for less than £6,000. Work out your loss by using £6,000 as the amount you sold your possession for, and report it in your tax return.