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What tax do you pay when you sell antiques?

  • 4 min read
  • 8 Jun 2022
What tax do you pay when you sell antiques

Don’t you wish that there was some undiscovered treasure collecting dust in a secret compartment of your house? Or is that just us? You’re here because you have some kind of valuable antique that you’re looking to sell. But before you decide to go down that route, you want to know what taxes you’ll have to pay, right? Well, let’s get into it!

What are antiques exactly?

Antiques are usually classed as over 100 years old, collectible items of high value. Anything that’s between 20-100 years old is considered vintage, usually referencing the 1900s to the 1960s. 

The number of years directly corresponds to what time period the item belongs to.

So that game console collecting dust at your dad’s house? Yeah, that’s retro. And those amazing sunglasses your mum got from her mum but won’t let you wear? They’re vintage. 

Another interesting (and yes, we’re using the word loosely) point is that every time period has a different focus on items, style, etc. For example, there’s lots of retro or vintage clothing that is popularised, as opposed to antique clothing. Conversely, antique furniture and paintings are far more common and valued than those of their retro counterparts. 

Not every item will have a high monetary value. 

With that being said, it’s worth trying to gather all the information you have regarding your item to help you prepare to sell further down the line. You can use online resources or speak to antique dealers for an appraisal. 

You can have antique:

Furniture 🛋

Jewellery 💍

Clocks 🕰

Kitchenware 🍽

Paintings 🖼

Swords ⚔️

And lots, lots more. 

Ok, now what’s a chattel?

A chattel is a really old word (we’re talking 13th century old) and it’s used to describe items of personal property. You have to be able to touch and move the item, so it has to be tangible and movable. So land wouldn’t be considered a chattel but a car would be. Most of the time, they’re considered to be assets or antiques, like jewellery or paintings.

What’s a wasting asset?

One quick differentiation to make is the difference between a wasting asset and just a normal asset or chattel. A wasting asset is exempt from certain taxes because its life expectancy goes down or it has a short lifespan. Racehorses, wine, watches, and vintage cars are examples of this.

A wasting chattel only has an expected useful life of 50 years and is exempt from Capital Gains Tax – woohoo!

Are chattels and antiques taxable?

Yep, disposing or selling of chattels and antiques is taxable. You’ll have to pay Capital Gains Tax on profits. 

 If you sell your chattel for more than £6,000 but less than £15,000, you’ll need to pay tax on the profit. If your proceeds are less than £6,000, you don’t have to do anything.

HMRC gives you some relief when selling assets. Using the 5/3 (five thirds) rule, you can calculate how much of the profit you’ll be taxed on. This is method one.

Use method two to calculate how much profit you’ll pay tax on by deducting expenses and how much you bought the asset for. You get to choose the lesser of the two figures!

Let’s go through an example together to simplify the scenario.

  • You buy a painting for £1,000
  • 5 years later, you sell it for £8,000 (£2,000 over the threshold)
  • It costs you nothing to sell (no expenses)
  • Multiply £2,000 by 5/3 = £3,333
  • £3,333 is the maximum chargeable gain

The actual gain will be calculated following these steps:

  • Take the original sale price of the asset
  • Minus expenses (there are none in this example)
  • Then subtract the original cost of the mirror from the sale price
  • £8,000 – £1,000 = £7,000 which is the original figure gain

When filling out the assets portion, pictured below, for Capital Gains Tax, you should put in the lower figure.

If your proceeds were more than £15,000, use the capital gains summary notes to figure out your chargeable gain, as normal CGT rules will apply.

Your situation

Outlined number oneOutlined number one
How did you make money?
Profit from capital gains
Annual salary
?
Other income
?

Tax and profit

Outlined number two
  • Your profit from
    shares
    £20,000
    Incl. £12,300 tax-free CGT allowance
    ?
  • Capital Gains Tax to pay
    £1,413
  • Profit after tax
    £18,587

How your capital gains tax is calculated

Your total capital gains tax (CGT) owed depends on two main components:

  1. How much you earn in total
  2. What type of assets you sell

Your overall earnings determine how much of your capital gains are taxed at 10% or 20%.
Our capital gains tax rates guide explains this in more detail.

In your case where capital gains from shares were £20,000 and your total annual earnings were £69,000:

Capital gains tax (CGT) breakdown

You pay no CGT on the first £12,300 that you make

You pay £127 at 10% tax rate for the next £1,270 of your capital gains

You pay £1,286 at 20% tax rate on the remaining £6,430 of your capital gains

Antiques and Inheritance Tax

You can hand pieces of art to the Arts Council and HMRC to cover some or possibly all of your Inheritance Tax (IHT) bill. Inheritance Tax is paid on assets you inherit from someone who has passed away.. 

HMRC’s Acceptance in Lieu (AIL) scheme enables you to transfer heritage assets to an approved museum or art institution to settle any IHT or estate duty that you may owe or may be liable for in the future.

The art, objects, or collections must be considered of “pre-eminent importance” on the basis of their national, scientific, historic or artistic interest and in acceptable condition.

What happens next?

  1. Contact HMRC’s heritage team – they’ll check what liability there is for tax and that the offer is being made by you (the person who owes or is liable for the tax)
  2. If the offer meets the criteria, HMRC will refer it to the AIL Panel of the Arts Council
  3. The Panel then makes the decision to move forward or not, based on the condition of the asset and what value to accept

Need more advice on your situation?

Get in touch with our accredited accountants to discuss your situation and maximise your tax efficiency!

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