Pre-owned chattels

Produced by Tolley

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

  • Pre-owned chattels
  • The conditions
  • The residence and domicile conditions
  • The contribution and disposal conditions
  • Use of chattels
  • The chargeable amount
  • The appropriate amount
  • Interest at the official rate
  • Non-exempt sales
  • Valuations
  • More...

Pre-owned chattels

Chattels are defined as “any tangible moveable property (or, in Scotland, corporeal moveable property) other than money”.

Chattels include, for example, paintings, antiques, furniture, vehicles, boats, racehorses, jewellery, musical instruments, computers, wines and spirits and collectible items.

The conditions

The residence and domicile conditions

In order for pre-owned asset tax (POAT) to apply to the individual for any tax year, he must be resident in the UK during that year, see the Residence ― overview guidance note.

Where the individual is UK resident but is domiciled outside the UK, the POAT applies only if the asset is situated in the UK. For this purpose, a person is domiciled in the UK at any time if he would be domiciled, or treated as domiciled, in the UK under IHT legislation. See the Domicile guidance note and IHTA 1984, s 267 for circumstances in which a person can be treated as domiciled in the UK.

If the individual has at any time been domiciled outside the UK, no regard is to be had to any property which is in a trust and situated outside the UK, so long as the settlor was not UK domiciled at the time he made the settlement.

See Simon's Taxes I3.740.

The contribution and disposal conditions

A charge to POAT arises in relation to chattels where an individual (the chargeable person):

  1. is in possession of, or has the use of, a chattel, whether alone or together with others, and

  2. either the disposal condition or the contribution condition is met

FA 2004, Sch 15, para 6(1)

The disposal condition is met where:

  1. at any time after 17 March 1986, the chargeable person had owned (whether alone or jointly with others):

    1. the chattel, or

    2. another asset which was sold and the proceeds used (directly or indirectly) to acquire the chattel, and

  2. the chargeable person disposed of all or part of his interest in the chattel or other asset other than by an excluded transaction (see the Pre-owne

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