CG76573 - Chattels and other assets: chattels: exempt and chargeable gains
Disposal consideration
TCGA92/S262
There is no chargeable gain on the disposal of a single chattel (tangible moveable property) if the gross consideration does not exceed £6,000.
Where the consideration exceeds £6,000 the chargeable gain may be restricted, see CG76577.
In any case where you have to use the market value of the asset rather than any actual consideration, you compare the £6,000 limit with that market value.
onwards tell you more about cases where you have to use the market value.
There are special rules which may apply where a number of similar chattels are disposed of. onwards tell you about these.
There are special rules where a chattel was owned by more than one person. You compare each person's share of the disposal consideration with their own separate limit.
Example
Mr and Mrs A jointly purchase a painting in 2009 for £2,000. In 2011 they sell it for £11,000. Their individual shares of the disposal consideration are £5,500 each. This is less than £6,000 so both of their disposals is exempt under TCGA92/S262.
Marginal relief
TCGA92/S262 (2)
If the consideration for the disposal of a chattel (tangible moveable property) is greater than £6,000, the chargeable gain may be restricted.
When a chattel is disposed of for more than £6,000 you calculate the difference between the disposal consideration and £6,000 then multiply that difference by 5/3. The answer is the maximum chargeable gain.
If the actual chargeable gain exceeds that amount, you exclude the excess and assess the smaller amount. If the actual chargeable gain is less than that amount, you assess the actual gain.
If the disposal consideration is £15,000 or more, the maximum chargeable gain exceeds the actual chargeable gain and no marginal relief is available.
Example
Miss S sells an antique mirror for £7,500. Her chargeable gain after allowing expenses is £4,000.
As the disposal consideration exceeds £6,000, the gain is not exempt but marginal relief is due.
First calculate the difference between the disposal consideration and £6,000:
consideration | 7,500 |
less | 6,000 |
excess | 1,500 |
The chargeable gain is the lesser of:
- £1,500 x 5/3 = £2,500
or
- the gain before marginal relief = £4,000
SO THE CHARGEABLE GAIN £2,500
NOTE Companies and other concerns within the charge to Corporation Tax may be able to claim indexation allowance, see CG17200C onwards.