A chattel is defined as “an asset which is tangible, moveable property” and a capital gain accruing on disposal of such property is not a chargeable gain where the taxable value or consideration does not exceed £6,000 (s262 TCGA 1992). Care must be taken to identify sets of chattels being disposed-of together which are effectively treated-as a single asset in applying the £6,000 limit (S262(4). This will be particularly relevant in considering collections of similar and complimentary items held by your client – for example sets of coins or stamps, or table and chairs (there is further guidance on identifying sets here – Chattels – sets).
Marginal relief
There is an effective tapering relief (“marginal relief”) for chattels disposed of for more than £6,000 giving a progressively reduced measure of relief according to the extent to which the disposal value exceeds this limit (s262(2)). This will only be of use if the actual gain exceeds the gain calculated under the marginal relief rules.
This is achieved by limiting the chargeable gain to 5/3rds of the excess of the sale proceeds over £6,000, and can be demonstrated by the following examples:
The taxable gains on a chattel with a cost of £1,000 would be calculated as follows if disposed of for the given values:
| Disposal value | Gain without relief | Maximum chargeable gain |
| £7,000 | £6,000 (5/3 x £1,000) | £1,666 |
| £10,000 | £9,000 (5/3 x £4,000) | £6,666 |
| £15,000 | £14,000 (5/3 x £9,000) | £14,000* |
(* marginal relief ceases to have effect where the sale proceeds exceed a certain figure because the marginal relief gain exceeds the actual gain beyond that point. With proceeds being £15,000, the marginal relief gain would be £14,999, higher than the actual gain of £14,000).
Wasting chattels
Wasting chattels – defined as chattels with an expected useful life of less-than 50 years – are subject to a separate exemption from CGT, unless they have qualified for capital allowances during the ownership period of the disposer, however, the £6,000 chattels exemption would still be available for such disposals excluded from the wasting asset exemption.
Antiques that are plant & machinery – for example, clocks and watches, are always regarded as wasting assets – regardless of their expected useful life and will be exempt from capital gains tax when sold for more-than £6,000 (unless affected by the availability of capital allowances as above).
Losses
Finally, returning to the focus of your question: if a chattel (that is not otherwise exempt) is sold for less-than £6,000 at a loss, the sale proceeds are deemed to be £6,000, resulting in a reduced loss or (262(3) TCGA 1992).
For example, a chattel with a cost of £20,000 is sold for £5,000: the sale is deemed to take place for £6,000 and the allowable loss for capital gains purposes is (£20,000 – £6,000) £14,000, rather than the actual loss of £19,000.
There is useful follow-up guidance about particular and unusual chattels in HMRC guidance which can be accessed here – CG76870p.
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