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Olympic Torch

RachelRachel Trusted RegularFMAAT, AAT Licensed Accountant Posts: 349
I am a little surprised by this, I thought it would come under chattels seeing as most runners had to pay for their torch but as they say over £6k it is subject to CGT. I bet a lot of the ebay sellers won't be expecting it.



Tax implications of selling your Olympic torch
Published 6 June 2012

Released 6 June 2012

HMRC outlines the income tax or CGT liability of selling your Olympic Torch or donating the sale proceeds to charity.

If I sell my torch will I be charged tax?

If the torch is worth less than £6,000 when you sell it then you will not have to pay Capital Gains Tax (CGT) on your proceeds. If it is worth more than £6,000 then you will have a chargeable gain, and you may have to pay CGT, depending on whether you have other gains in the tax year. If you have to pay CGT, the rate charged will be either 18 per cent or 28 per cent, depending on your total income for the year.

You should bear in mind the possibility that selling your torch might be, or might be part of, a trade, in which case any profit would be charged to Income Tax rather than CGT. People who occasionally sell a few personal possessions to raise some cash are not trading, but the things they sell may still give rise to taxable gains as explained above. However if someone regularly sells goods or services, they are likely to be trading and will be liable to Income Tax on their trading profits.

If I sell my torch and give the proceeds to charity through Gift Aid what is my tax position?

Depending on the amount received, you may incur a CGT charge. There is no exemption from CGT even if you donate the money you receive on selling the torch to charity.

If you decide to donate the sale proceeds, or the net sale proceeds after CGT, to a charity you will be able to make the donation of money under Gift Aid. For every £100 you donate the charity will reclaim £25 from HM Revenue & Customs (HMRC). In order for the donation to be valid under Gift Aid you will need to pay enough Income Tax or CGT in the tax year to cover the amount of tax the charity will reclaim on your gift.

What if I donate my torch to a charity rather than sell it myself?

If you give the torch to a charity for them to keep or sell themselves there will be no charge to CGT.

Comments

  • Steve CollingsSteve Collings Experienced Mentor Registered Posts: 997
    Hmmm. How will all this be policed? Should HMRC not be directing their attention to REAL evaders?
  • anniemanniem Experienced Mentor Pewsey, WiltshireRegistered Posts: 1,326
    I find it quite astonishing that they can't organise themselves yet don't seem to miss a trick.

    Why aren't HMRC run properly, like a bank or proper 'big' business????

    I'm having trouble just getting clients registered to my login with 64-8's, yet they are busy worrying about Olympic torches.
    I also have a client with best part of £6k sitting on their balance sheet which HMRC refunded having not known what to do with it after a VAT fiasco.

    They really beggar belief sometimes. Just my view :)
    FMAAT - AAT Licensed Member in Practice - Pewsey, Wiltshire
  • uknittyuknitty Experienced Mentor Registered Posts: 591
    I wonder what the tax implications of selling THIS Olympic memorabilia would be...

    :lol:
  • anniemanniem Experienced Mentor Pewsey, WiltshireRegistered Posts: 1,326
    Astounding ..... I was looking for the photo of the Royal Mail van alight! :lol:
    FMAAT - AAT Licensed Member in Practice - Pewsey, Wiltshire
  • MarkTMarkT Trusted Regular Registered Posts: 302
    uknitty wrote: »
    I wonder what the tax implications of selling THIS Olympic memorabilia would be...

    :lol:

    The 'bin' size one? Surely the HMRC instead of closing banking loopholes could slap on a charge for reduced VAT as it would be a form of heating? :001_rolleyes:
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