Chattels and CGT
A charge to Capital Gains Tax (CGT) usually arises after an asset is sold. However, there are special rules concerning the sale of chattels. Chattel is a legal term which defines an article of movable personal property. Chattels with a predictable useful life of 50 years or less are normally exempt from CGT. Chattels include items like household furniture, paintings, antiques, items of crockery and china, plate and silverware, motor cars, lorries, motorcycles and items of plant and machinery not permanently fixed to a building.
Gains on chattels are exempt if proceeds do not exceed £6,000 per item and marginal relief may be available where the proceeds are between £6,000 and £15,000. The taxable gain is calculated as the lower of the actual gain or 5/3rds of the excess over £6,000.
There are special rules for sets of chattels. A set is two or more chattels together which are similar and complementary to each other, and worth more together than separately. Examples include a pair of candlesticks or a chess set. Where a set is sold the £6,000 limit applies to the set and there are special rules to sets which have been sold in separate parts.