Capital Gains Tax

[edd_jedi]

So after reading the entire gov.uk section on capital gains tax on personal possessions:

https://www.gov.uk/capital-gains-tax-personal-possessions/sets
I'm still none the wiser as to whether Star Wars toys fall under it. Do they have a limited lifespan? Are they part of a set? All these things affect it.

Context - we're considering doing some home improvements, and with current awful mortgage rates, remortgaging isn't really an option.

I am struggling to work out if I can sell some of my collection to fund this work, without paying tax on it (or if I do, how much.)

Anyone else in the UK done similar? The project is too big for "cash sales" so would likely have to sell through eBay and PayPal etc.

Any advice appreciated!

 

[edd_jedi]

Sorry probably worth mentioning the ballpark figure - tens of thousands.

 

[Michael Sith]

Tax is a minefield!

the way I read that, if SW is deemed as a set, if you sell to separate people for under £6K you don't pay CGT

"If you sell parts of a set to different people, you won't pay tax on each part sold for less than £6,000."

but then does it come under normal tax rules and get taxed as an "income" as ebay, vinted etc are obliged to infor HMRC as I read it

bit of a minefield … and tax laws are a massive headache

hopefully someone with experience in this area will chip in for you Edd, good luck!

 

[welshwookie]

You might be best selling at an organised event Edd if there's a lot. I don't know where you stand taking payment via PayPal f&f,or if they declare the £6k limit to hmrc. Cash is king as they say.

 

[theforceuk]

Set up an online toy shop and put the home improvements under cost of creating a packing room. Only stumbling block would be planning consent. In theory you could create a business which makes a loss in the first year although you've refurbished your house and sold part of your collection.

If only it was that easy.

 

[jayjedi]

It says that you don't have to pay on items with a limited life span, such as watches or machinery. Surely plastic toys are seen as less durable than a watch or machinery?

 

[lejackal]

As with any legal definition it's often decided by test cases, or cited examples of x, y or z.

Ultimately if it went to court its the strength of your argument vs that of HMRC. You could point to the grading and casing of figures and cards as proof that they degrade over time.

There will be studies about the long term viability of a glue heat seal, plastic degradation, card integrity etc.Facebook, SWFUK, IG, RS etc will all be awash with photos of broken bubbles, creased, warped, separating cards, discoloured cards and figures, ruined packaging etc etc

Given time I'd genuinely be confident of arguing the 50 year rule with cited examples.

 

[Clarkspie&chips]

Set up an online toy shop and put the home improvements under cost of creating a packing room. Only stumbling block would be planning consent. In theory you could create a business which makes a loss in the first year although you've refurbished your house and sold part of your collection.

If only it was that easy.

The problem with doing this is the business will own that part of the house so selling up will be very difficult!

 

[Clarkspie&chips]

I see they've also massively reduced the personal capital gains tax allowance down to £3k so even if the collection is tax liable, this won't help out by much either.
They're really going all in on screwing the everyman for tax aren't they.

 

[ODB]

I'm not up with the latest on Tax but if memory serves (if its just the vintage Star Wars Toys) these are likely to be viewed as Non Wasting Chattels by HMRC so subject to the £6k limit, but be wary of the set rules as that would negate the £6k per item rule. Best to get some specialist advice especially with HMRC looking to take a more proactive look at the likes of Ebay, Paypal and cash transactions.

 

[welshwookie]

I'm not up with the latest on Tax but if memory serves (if its just the vintage Star Wars Toys) these are likely to be viewed as Non Wasting Chattels by HMRC so subject to the £6k limit, but be wary of the set rules as that would negate the £6k per item rule. Best to get some specialist advice especially with HMRC looking to take a more proactive look at the likes of Ebay, Paypal and cash transactions.

If you book a table at an organised selling event, and took cash only payments who would know what you actually sold ?
The event organisers are not going to ask for an itemised list for sale, and final sales.
So logically these events could be the most beneficial in the future.
We have a local pub that serves food. Cash only. Obviously there is a reason for it- but you can't force any business to take credit card payments.

 

[edd_jedi]

From the last few Farthest From events I've been to, direct sales at shows seem very slow. I remember 3-4 years ago sellers doing very well at events, but I think that feeding frenzy has sailed.

 

[lejackal]

From the last few Farthest From events I've been to, direct sales at shows seem very slow. I remember 3-4 years ago sellers doing very well at events, but I think that feeding frenzy has sailed.

Echo live would see more sales than FF these days I think. Alternatively you could arrange collection or drop off for cash, especially if you did a bit of a bulk deal - might not get FMV but if it wasn't too much off and saved tax related issues then it could be beneficial. And cash may help with certain elements of the renovation costs.

 

[welshwookie]

From the last few Farthest From events I've been to, direct sales at shows seem very slow. I remember 3-4 years ago sellers doing very well at events, but I think that feeding frenzy has sailed.

That might change soon Edd, if it turns out be the best way to sell items, for both parties involved. Or possibly on the FB sites as cash on collection.

 

[jayjedi]

Think Edd might be a bit wary of " I live at ... come and collect" with good reason. You could sell the cheaper items on here, and sell others at a convention for cash. If you don't think you have enough for a full stall, I am sure others would be willing to chip in and share the stall.

 

[welshwookie]

Think Edd might be a bit wary of " I live at ... come and collect" with good reason. You could sell the cheaper items on here, and sell others at a convention for cash. If you don't think you have enough for a full stall, I am sure others would be willing to chip in and share the stall.

Most arrange a mutually beneficial location these days due to the reason mentioned. However , will this result in collectors stopping collecting, or thinning out collections in the future ?
We all like to hope our collections would be a nice inheritance or rainy day money- someday. Would the kids be taxed on it in the future if they came to sell it ?

 

[monkey_roo]

I think sadly our kids (who lets face it only have eyes for eBay when it comes to our collections - or mine does anyway ) - will face a tax issue. I'm no expert but there have been a few reports on chances to HRMC's rules and approaches from this year: https://www.theguardian.com/money/2...online-be-warned-hmrc-will-soon-know-about-it

I think this new move could well push down online sales and push people back to in real life transactions... Cash is king....

 

[jayjedi]

Will this website have to pass on sales details to HMRC? or is it just the big boys?

 

[monkey_roo]

As I see it, this site doesn't actually manage transactions, it's more like 'classifieds' from back in the day - so I would say not - but it may have to post a disclaimer somewhere saying that sellers must declare what they have to on their forms etc. - a liability waver of sorts? I'm no expert or anything.

 

[edd_jedi]

nothing passed on by us to my knowledge!

 

[supergoose]

I think sadly our kids (who lets face it only have eyes for eBay when it comes to our collections - or mine does anyway ) - will face a tax issue. I'm no expert but there have been a few reports on chances to HRMC's rules and approaches from this year: https://www.theguardian.com/money/2...online-be-warned-hmrc-will-soon-know-about-it

I think this new move could well push down online sales and push people back to in real life transactions... Cash is king....

Thanks for that link - interesting read. There's going to be a lot of grey area with the statement "HMRC says people selling off items that they originally bought at a higher price will not be liable for tax on that income" if original items were bought face to face for cash at toy fairs etc. how can either side prove either way ?

 

[lejackal]

Do people honestly think HMRC are sufficiently resourced to go through eBay/paypal etc sales to then audit people? There's no legal requirement to keep proof of purchase for every item you sell, you could just as easily get a few receipt books to say you bought x, y or at whatever toy fair, in whatever year, for whatever amount in cash. HMRC then have to prove otherwise. Which unless your bank etc has evidence to the contrary in the last 7/8 years they can't do

 

[supergoose]

Do people honestly think HMRC are sufficiently resourced to go through eBay/paypal etc sales to then audit people? There's no legal requirement to keep proof of purchase for every item you sell, you could just as easily get a few receipt books to say you bought x, y or at whatever toy fair, in whatever year, for whatever amount in cash. HMRC then have to prove otherwise. Which unless your bank etc has evidence to the contrary in the last 7/8 years they can't do

Agreed. The concerning thing in the article though was the statement "Sellers on eBay will need to supply their national insurance number, and the site says it will launch information pages with the details it will be collecting" Sounds like they are edging towards this being automated so no real resources needed on HMRC's side just a automatic brown HMRC envelope arriving at the door at the end of each tax year saying what you owe ? Hope I'm wrong. I sell fairly infrequently on ebay (when I do it's personal items / collectibles usually to fund recent overspending on star wars items lol), but over the course of a year I would easily break their thresholds outlined. I guess time will tell.......

 

[edd_jedi]

I agree that generally the likelihood of being singled out are slim, but my main concern is having a large amount of money come into my bank or PayPal with no explanation, could even get flagged as money laundering

 

[lejackal]

I agree that generally the likelihood of being singled out are slim, but my main concern is having a large amount of money come into my bank or PayPal with no explanation, could even get flagged as money laundering

You can prove sales, they have to prove profit imo

 

[supergoose]

You can prove sales, they have to prove profit imo

True

 

[ODB]

You can prove sales, they have to prove profit imo

No they can assess you and if you can't prove the profit you've declared they can establish one for you.

Also if you pay in a large amount of cash the bank will go through the money laundering checks and again it could flag you to HMRC.

 

[Palifan]

Not really sure what to make of all of this but it does make me think twice about seelling too much on ebay each year. I can see this changing things though for sellers and maybe as mentioned earlier, it could mean that things go back to a more 'cash' transaction at toy fairs ect.

I would have thought though that the first targets will be those that sell loads of items each year and don't declare any of it, I'm sure there are a lot of those sellers out there.

Ian