Chattel is a legal term which defines an article of movable personal property. A charge to Capital Gains Tax (CGT) usually arises after an asset is sold. However, there are special rules concerning the sale of chattels. 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.
The disposal proceeds will normally be the amount of money you received when you disposed of the chattel.

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 matching ornaments or a set of chess pieces. Where a set is
sold, the £6,000 limit applies to the set and there are special rules to sets that have been broken up and sold separately. HMRC’s Helpsheet – HS293 Chattels and Capital Gains Tax explains how chattels are treated for CGT and includes details of how to calculate
gains and losses.

Source: New feed