Chattels 5/3 rule
hphil
Registered Posts: 2
in Personal Tax
In my Osborne book. I am stuck on this question because an antique painting is sold for £300,000 that was originally bought for £60000. She had also spent £50,000 restoring the painting. As this is a Chattel sold at a gain for over £6000 why does the 5/3 rule not seem to apply in the answers?
It seems to not apply to all of the antique paintings in examples but does apply to any other antiques!
It seems to not apply to all of the antique paintings in examples but does apply to any other antiques!
0
Comments
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Hi,
I believe the 5/3 rule for chattels applies where the cost of acquisition is less than £ 6,000, in your example it was brought for £ 60,000.0 -
Crispy is correct but you could apply the 5/3 rule, anyway. The actual gain is £190,000. The alternative is 5/3(300,000 - 6,000)=£490,000. The actual gain applies, as it is the lesser of the two.0
