Produced by Tolley

The following Personal Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Chattels
  • Cheap chattels
  • Anti-avoidance
  • Wasting chattels
  • Wasting assets which are not chattels
  • Plant and machinery
  • Sale at a gain
  • Sale at a loss
  • Plant used in the trade of another person

The term ‘chattel’ means tangible moveable property; assets which can be seen, touched and moved.

Chattels include paintings, antiques, racehorses and computers. Assets such as buildings, pieces of land, leases or shares are not chattels because they cannot be seen, touched and moved. Land and buildings are not moveable assets, and assets such as leases and shares are intangible assets.

This guidance note considers the capital gains tax consequences of selling:

  1. cheap chattels (including anti-avoidance where the transactions are linked)

  2. wasting chattels

  3. chattels which have been subject to claims for capital allowances

Cheap chattels

A cheap chattel is a non-wasting chattel, ie tangible moveable property that will last for more than 50 years (eg paintings, antiques and jewellery). See below for a discussion of wasting chattels.

Before considering the rules for cheap chattels, you need to decide whether the asset disposed of is exempt under other statutory provisions. See the Exempt assets guidance note.

The rules on the disposal of cheap chattels can be summarised in the table below:

Proceeds≤ £6,000> £6,000
≤ £6,000ExemptLoss restricted (proceeds deemed to be £6,000)
> £6,000Gain restricted to max of 5/3 of (gross proceeds – £6,000)Normal capital gains tax rules

That is to say:

  1. if the sales proceeds and costs of acquisition are £6,000 or less, the asset is exempt from capital gains tax

  2. if the proceeds are £6,000 or less and the costs of acquisition are more than £6,000 the capital loss is restricted by deeming the proceeds to be £6,000

Popular documents