Business Services • Business Tax
Basis period reform is a significant change to the way the trading profits of sole traders, partners...
By RJP LLP on 16 May, 2024
Business Tax • capital gains tax (cgt) • HMRC • Personal tax • Tax Planning • Taxation • Uncategorized
Sales of Olympic torches could trigger CGT liability
By RJP LLP on 25 June 2012
It wouldn’t be right if we didn’t cover a tax issue with an Olympic flavour just as the games are about to start in London. HMRC has given us a perfect opportunity after they issued guidance to those lucky taxpayers who happen to be in possession of an Olympic torch and may decide to sell it – by reminding us that they will make a capital gain from any such sale.
The guidelines relating to CGT and Olympic torches were issued after a couple of torches were offered for sale on eBay where they fetched thousands of pounds. A quick search when writing this article verifies this as more than a mere urban myth and has thrown up an official torch available for a ‘buy it now’ price of £4,000, giving an indication of the strong demand for Olympics memorabilia.
According to HMRC if you sell a torch for more than £6,000 it might be subject to capital gains tax. This is dependent on any other gains you might accrue during the tax year, and this gain will be charged at a tax rate of either 18% or 28% depending on total income levels.
There is of course the opportunity to then donate all or some of the proceeds to charity as a gift aid donation and claim higher rate tax relief on the donation. Alternatively, if you are in possession of a torch and genuinely want to use it to make a charitable donation, you could just give your chosen charity the torch itself. You are then able to claim an exemption from capital gains tax, together with income tax relief, and your chosen charity can either keep the torch or sell it to secure their funds directly.
There’s a lot happening near to RJP’s offices in the run up to the Olympics, which open on July 27th and run until August 12th. The torch relay will be coming very close to our offices as it passes down the Upper Brighton Road in Surbiton, before heading out to Kingston.
Inevitably, the event will bring with it some interruption to ‘business as usual’ and we are planning ahead to ensure this doesn’t impact clients. The most likely cause of disruption will be the cycling ‘time trials’, taking place on August 1st. In response to this, RJP has made the decision to close its offices on that day because diversions and high traffic levels in the area will make road journeys impractical for staff and clients alike. We will be working from home and contactable by email and on our mobiles that day, should you need to reach us.
If you are lucky enough to have an Olympic Torch and want to sell it, contact Lesley Stalker (who won’t buy it from you, but will be happy to discuss any tax implications!)
