HMRC Is Shite

HMRC Is Shite
Dedicated to the taxpayers of Britain, and the employees of Her Majesty's Revenue and Customs (HMRC), who have to endure the monumental shambles that is HMRC.

Friday, 8 June 2012

HMRC Guidance For Selling Olympic Torches




Given that the forthcoming Olympics are about making money, rather than sport, HMRC has very wisely issued some guidance to those people who are thinking of selling their Olympic torches.
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Selling your Olympic Torch

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.

Find out more about what is liable to Capital Gains Tax and how to calculate any liability

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."

Tax does have to be taxing.

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