Home > Ask Our Experts > Sold Collectible Item: Am I Liable For Capital Gains Tax?

Sold Collectible Item: Am I Liable For Capital Gains Tax?

By: J.A.J Aaronson - Updated: 13 Jul 2018 | comments*Discuss
 
Capital Gains Tax Cgt Assets 18 Per Cent

Q.

I sold a John Lennon autograph. He did a 'sketch' to accompany the signature. Am I liable for capital gains on this? I am over 65.

(S.S, 11 May 2009)

A.

Capital Gains Tax (CGT) is something which affects comparatively few people. While particularly wealthy individuals frequently arrange their finances in such a way as to fall mainly under the auspices of CGT rather than Income Tax, and are therefore very well versed in its intricacies, most people have no cause to look into this particular form of taxation. However, in instances in which valuable assets are being sold, a CGT liability may arise.

You have not mentioned how much you sold the autograph and sketch for. This is important, as it is likely to determine whether or not you must pay CGT. Capital Gains Tax is payable on the difference between what you paid for an asset and what you earn when you dispose of it. This might be through a sale, exchange or gift. If you were given the item in the first place, CGT may be payable on the entire sale value, as you did not pay anything to acquire it.

Allowances Entitlement

To begin with, it should be noted that CGT is only payable on assets worth more than £6,000 when you sell them. Already, depending on the value of the signature and sketch, this may mean that you do not have a tax bill to pay.

If the item was worth more than £6,000 when it was sold, you should take into account the other allowances to which you may be entitled. To begin with, you can offset any losses that you have sustained on other asset sales. For example, if you sold another asset for less than you paid for it, you may be able to reduce your potential CGT bill as a result. Furthermore, you will be entitled to an annual tax-free allowance of £11,700 for the 2018-19 tax year*.

If, once the relevant allowances have been taken into account, you find that you are liable for a CGT bill, you will then normally have to pay it via Self Assessment. CGT is levied at 10% on your gains.

*Figures have been updated to relate to the current 2018-19 tax year.

You might also like...
Share Your Story, Join the Discussion or Seek Advice..
Why not be the first to leave a comment for discussion, ask for advice or share your story...

If you'd like to ask a question one of our experts (workload permitting) or a helpful reader hopefully can help you... We also love comments and interesting stories

Title:
(never shown)
Firstname:
(never shown)
Surname:
(never shown)
Email:
(never shown)
Nickname:
(shown)
Comment:
Validate:
Enter word:
Latest Comments
  • Sbuj
    Re: How Will My Second Job Be Taxed?
    Hi I have full time job plus extra part time if I will start working for agency tax for one of my extra jobs will b change…
    16 October 2018
  • Lizzie
    Re: Children's Bonus Bond
    I was bought a £25 Children's Bonus Bond as a christening present in 2001 and was wondering how much it is worth now and when it matures.
    8 October 2018
  • Storm
    Re: What Does Road Tax Pay For?
    I see a fair bit of pothole repairs, the biggest problem I see is the work carried out is very poor indeed more often than not as…
    26 September 2018
  • PETA
    Re: Payment of Pensions
    Can I change my pension to weekly how does this work
    20 September 2018
  • Kaz
    Re: How Will My Second Job Be Taxed?
    Up until june this year i only had 1 job of 14 hrs a wk at minimum.wage, i now have 3 jobs, the 2nd one being 6.7 hrs a wk @…
    19 September 2018
  • Dom
    Re: Claiming Tax Relief on Mileage
    I am paid a £250 per month travel allowance with my salary, and claim monthly travel expenses each month from the company for…
    13 September 2018
  • Fifi
    Re: How Will My Second Job Be Taxed?
    Hi I’m working 22hrs a week at 7.85ph but also signed up to an agency to work as and when, how much tax would I pay
    11 September 2018
  • Littledigidi
    Re: Claiming Tax Relief on Mileage
    Hi - I have a fuel card, the majority of my mileage is work related. can i claim any tax back on this. My company pay for all my…
    10 September 2018
  • TheTaxGuide
    Re: How Will My Second Job Be Taxed?
    B - Your Question:I have two jobs the first is as and when and the second is 12 hrs a week, combined I am nowhere near the…
    4 September 2018
  • Loui
    Re: How Will My Second Job Be Taxed?
    I am employed working 15hrs at £8.20 but get paid monthly and I'm self employed for 2 hrs a week at £8.00 a week. Would I get…
    3 September 2018