|
|
Tax issues when selling art, by Poppy Sunshine on Apr 25, 2018 7:29:37 GMT 1, I can’t help thinking that the amount of big ticket pieces of art sold on the forum must attract tax issues at some point.
I understand the first £6k of a piece of art sold is exempt from capital gains tax (CGT) but the rest will be chargeable depending how far it is over and above the original purchase price.
Please feel free to correct me if this is wrong.
Considering a lot of us bought our art at reasonable prices a few years ago that will probably leave plenty falling into the taxable bracket.
I can’t even remember what I paid for most of it so how the tax man prove that I paid £600 rather than £6k for example I’m unsure. I guess the onus of proof is on me.
Does anyone declare it or do you take the risk?
Also, does anyone have any good ideas for protecting our art from tax to a certain degree?
For example would it lower any tax element by sheltering it in a company and selling it as a business asset or gallery piece ?
Forgive me if anything above is a daft question or has an obvious answer but thought I’d throw it out there and see if brought any good info to light for myself and anyone else who is unsure and doesn’t want to get a knock on the door from HM customs and excise.
I can’t help thinking that the amount of big ticket pieces of art sold on the forum must attract tax issues at some point.
I understand the first £6k of a piece of art sold is exempt from capital gains tax (CGT) but the rest will be chargeable depending how far it is over and above the original purchase price.
Please feel free to correct me if this is wrong.
Considering a lot of us bought our art at reasonable prices a few years ago that will probably leave plenty falling into the taxable bracket.
I can’t even remember what I paid for most of it so how the tax man prove that I paid £600 rather than £6k for example I’m unsure. I guess the onus of proof is on me.
Does anyone declare it or do you take the risk?
Also, does anyone have any good ideas for protecting our art from tax to a certain degree?
For example would it lower any tax element by sheltering it in a company and selling it as a business asset or gallery piece ?
Forgive me if anything above is a daft question or has an obvious answer but thought I’d throw it out there and see if brought any good info to light for myself and anyone else who is unsure and doesn’t want to get a knock on the door from HM customs and excise.
|
|
silvermyn
Junior Member
🗨️ 1,612
👍🏻 781
April 2008
|
Tax issues when selling art, by silvermyn on Apr 25, 2018 10:19:01 GMT 1, I can’t help thinking that the amount of big ticket pieces of art sold on the forum must attract tax issues at some point. I understand the first £6k of a piece of art sold is exempt from capital gains tax (CGT) but the rest will be chargeable depending how far it is over and above the original purchase price. Please feel free to correct me if this is wrong. Considering a lot of us bought our art at reasonable prices a few years ago that will probably leave plenty falling into the taxable bracket. I can’t even remember what I paid for most of it so how the tax man prove that I paid £600 rather than £6k for example I’m unsure. I guess the onus of proof is on me. Does anyone declare it or do you take the risk? Also, does anyone have any good ideas for protecting our art from tax to a certain degree? For example would it lower any tax element by sheltering it in a company and selling it as a business asset or gallery piece ? Forgive me if anything above is a daft question or has an obvious answer but thought I’d throw it out there and see if brought any good info to light for myself and anyone else who is unsure and doesn’t want to get a knock on the door from HM customs and excise. I would be surprised if anyone in their right mind would come on a public forum and openly state that they don't pay their taxes and "take the risk". However, I may stand to be corrected...
In the UK it is clear that you may have to pay Capital Gains Tax when you dispose of a painting. To me it's not clear whether a limited edition print would fall within the range of personal possessions that HMRC would be expecting you to declare in the event of a disposal resulting in a profit. Maybe the question should have been: what art is a personal possession for the purposes of Capital Gains Tax in the UK?
There may be relevant exemptions for prints or other artworks, or ways of holding art that allow gains to be exempt (e.g. via a pension plan); I am no expert. But I would imagine that if HMRC knew that a GWRB 150 edition originally costing £150.00 goes for six figures these days then they would probably be very interested in getting their share of any gain subject to any available exemptions.
Anyone in doubt should take some formal tax advice if they are concerned.
I can’t help thinking that the amount of big ticket pieces of art sold on the forum must attract tax issues at some point. I understand the first £6k of a piece of art sold is exempt from capital gains tax (CGT) but the rest will be chargeable depending how far it is over and above the original purchase price. Please feel free to correct me if this is wrong. Considering a lot of us bought our art at reasonable prices a few years ago that will probably leave plenty falling into the taxable bracket. I can’t even remember what I paid for most of it so how the tax man prove that I paid £600 rather than £6k for example I’m unsure. I guess the onus of proof is on me. Does anyone declare it or do you take the risk? Also, does anyone have any good ideas for protecting our art from tax to a certain degree? For example would it lower any tax element by sheltering it in a company and selling it as a business asset or gallery piece ? Forgive me if anything above is a daft question or has an obvious answer but thought I’d throw it out there and see if brought any good info to light for myself and anyone else who is unsure and doesn’t want to get a knock on the door from HM customs and excise. I would be surprised if anyone in their right mind would come on a public forum and openly state that they don't pay their taxes and "take the risk". However, I may stand to be corrected...
In the UK it is clear that you may have to pay Capital Gains Tax when you dispose of a painting. To me it's not clear whether a limited edition print would fall within the range of personal possessions that HMRC would be expecting you to declare in the event of a disposal resulting in a profit. Maybe the question should have been: what art is a personal possession for the purposes of Capital Gains Tax in the UK?
There may be relevant exemptions for prints or other artworks, or ways of holding art that allow gains to be exempt (e.g. via a pension plan); I am no expert. But I would imagine that if HMRC knew that a GWRB 150 edition originally costing £150.00 goes for six figures these days then they would probably be very interested in getting their share of any gain subject to any available exemptions.
Anyone in doubt should take some formal tax advice if they are concerned.
|
|
|
|
Tax issues when selling art, by artmonster on Apr 25, 2018 10:21:24 GMT 1, Love the last line!
Love the last line!
|
|
silvermyn
Junior Member
🗨️ 1,612
👍🏻 781
April 2008
|
Tax issues when selling art, by silvermyn on Apr 25, 2018 10:30:10 GMT 1, Yeah, standard stuff 
But I wouldn't be surprised if someone got some duff info on here and then tried to use it as an explanation to the tax authorities.
Yeah, standard stuff
But I wouldn't be surprised if someone got some duff info on here and then tried to use it as an explanation to the tax authorities.
|
|
|
|
Tax issues when selling art, by Poppy Sunshine on Apr 25, 2018 10:42:11 GMT 1, Yes that's sort of the reason I brought it up and yes silvermyn it would certainly help to know which specific art falls into the relevant category.
I imagine there are plenty of people on the forum who might be concerned or even totally unaware of the issue.
Having seen all sorts of things raised, debated and sometimes resolved by the huge depth of knowledge within the membership I considered it worth putting out there for discussion in the hope that we may have someone among us with an expert angle. The people lurking on here never cease to surprise me.
Who knows, we may get a single piece of wisdom which will save a lot of us a lot of time and effort individually rushing to pay our accountants for the answer.
And just in case one of the lurkers is a tax office employee it's probably best to hold back on a full confession just for now.
Yes that's sort of the reason I brought it up and yes silvermyn it would certainly help to know which specific art falls into the relevant category.
I imagine there are plenty of people on the forum who might be concerned or even totally unaware of the issue.
Having seen all sorts of things raised, debated and sometimes resolved by the huge depth of knowledge within the membership I considered it worth putting out there for discussion in the hope that we may have someone among us with an expert angle. The people lurking on here never cease to surprise me.
Who knows, we may get a single piece of wisdom which will save a lot of us a lot of time and effort individually rushing to pay our accountants for the answer.
And just in case one of the lurkers is a tax office employee it's probably best to hold back on a full confession just for now.
|
|
Deleted
🗨️ 0
👍🏻
January 1970
|
Tax issues when selling art, by Deleted on Apr 25, 2018 17:51:36 GMT 1, no mr tax man i didnt sell it i swapped it for hundreds of limited edition prints of queen elizabeth.
no mr tax man i didnt sell it i swapped it for hundreds of limited edition prints of queen elizabeth.
|
|
|
|
chainsaw
New Member
🗨️ 130
👍🏻 72
June 2017
|
Tax issues when selling art, by chainsaw on Apr 25, 2018 18:36:31 GMT 1, www.gov.uk/capital-gains-tax-personal-possessions
www.gov.uk/capital-gains-tax-personal-possessions/sets
A personal possession is a non business asset, it can be anything - second house, sailing boat, a stamp, a print, or a painting. But not mechanical (eg a clock or a toaster).
10 prints you bought for £50 each as a set, and sold together for £6,600 would in theory attract capital gains.
If you transfer the asset to a company, you pay for the "benefit" of enjoying it....
You only have to pay Capital Gains Tax on your overall gains on selling all your possessions in a year are above your tax-free allowance (called the Annual Exempt Amount) which is £11,700 at the moment.
So thats selling 2 items in a year and making £6k profit on each.
Go have a word with an accountant if you are unsure.
You need to report your gains in your tax return if both of the following apply:
you’re registered for Self Assessment,
the total amount you sold the assets for was more than 4 times your allowance before expenses/costs etc.
You don’t have to pay tax if your total taxable gains are under your Capital Gains Tax allowance, which is £11,700.
look at the website, it helps.
www.gov.uk/capital-gains-tax-personal-possessionswww.gov.uk/capital-gains-tax-personal-possessions/setsA personal possession is a non business asset, it can be anything - second house, sailing boat, a stamp, a print, or a painting. But not mechanical (eg a clock or a toaster). 10 prints you bought for £50 each as a set, and sold together for £6,600 would in theory attract capital gains. If you transfer the asset to a company, you pay for the "benefit" of enjoying it.... You only have to pay Capital Gains Tax on your overall gains on selling all your possessions in a year are above your tax-free allowance (called the Annual Exempt Amount) which is £11,700 at the moment. So thats selling 2 items in a year and making £6k profit on each. Go have a word with an accountant if you are unsure. You need to report your gains in your tax return if both of the following apply: you’re registered for Self Assessment, the total amount you sold the assets for was more than 4 times your allowance before expenses/costs etc. You don’t have to pay tax if your total taxable gains are under your Capital Gains Tax allowance, which is £11,700. look at the website, it helps.
|
|
sufsean
Junior Member
🗨️ 1,315
👍🏻 655
August 2013
|
Tax issues when selling art, by sufsean on Apr 25, 2018 18:45:09 GMT 1, Essentially all income should be reported. You can use a Schedule C for selling art, or whatever on the side.
Essentially all income should be reported. You can use a Schedule C for selling art, or whatever on the side.
|
|
moron
Junior Member
🗨️ 2,711
👍🏻 1,051
September 2017
|
Tax issues when selling art, by moron on Apr 26, 2018 14:59:09 GMT 1, I disagree that all income should be reported considering how the government wastes billions in taxpayers money.
If someone private sells an artwork at a loss does the tax man give a fuck and makes it tax deductable, do they fuck.
I disagree that all income should be reported considering how the government wastes billions in taxpayers money.
If someone private sells an artwork at a loss does the tax man give a fuck and makes it tax deductable, do they fuck.
|
|
racket
Junior Member
🗨️ 1,167
👍🏻 678
September 2017
|
Tax issues when selling art, by racket on Apr 26, 2018 16:24:02 GMT 1, It's only a tax issue If you decide to declare it
It's only a tax issue If you decide to declare it
|
|
astbury
New Member
🗨️ 461
👍🏻 251
August 2013
|
Tax issues when selling art, by astbury on Apr 26, 2018 16:52:31 GMT 1, It's only a tax issue If you decide to declare it
I take it from your comment that you don't declare any capital gains then racket ?
It's only a tax issue If you decide to declare it I take it from your comment that you don't declare any capital gains then racket ? |
|
racket
Junior Member
🗨️ 1,167
👍🏻 678
September 2017
|
Tax issues when selling art, by racket on Apr 26, 2018 17:32:16 GMT 1, It's only a tax issue If you decide to declare it I take it from your comment that you don't declare any capital gains then racket ?
You've taken an interest in a comment that was throwaway. The annual allowance is about £12k, I'd say a lot on here would fall into that category.
It's only a tax issue If you decide to declare it I take it from your comment that you don't declare any capital gains then racket ? You've taken an interest in a comment that was throwaway. The annual allowance is about £12k, I'd say a lot on here would fall into that category. |
|
galaxy01
New Member
🗨️ 557
👍🏻 482
November 2016
|
Tax issues when selling art, by galaxy01 on Apr 28, 2018 9:40:13 GMT 1, These issues are common.
If you have a job and earn past your tax free allowance, you should technically declare anything you sell. Be it old shoes, a car or art. If you get profit from selling anything you should declare it. The types of product which you sell 2nd hand for a profit are few. But a lot of art does.
So yes, you should declare all profit from art sales. Self assessment should be done.
Who does? No one really. But if you make a lot from art dealing, or use it as a second income then you certainly want to do it, else you will be back paying tax for 5 years plus a fine if you get caught.
If you profit say 10k or less a year, you can probably not worry, any more and i would not risk it.
Speak to HMRC (they are very helpful on the phone) or talk to an accountant (its amazing how much free advice they give thinking you want to use their services) then decide if you need to declare it.
These issues are common.
If you have a job and earn past your tax free allowance, you should technically declare anything you sell. Be it old shoes, a car or art. If you get profit from selling anything you should declare it. The types of product which you sell 2nd hand for a profit are few. But a lot of art does.
So yes, you should declare all profit from art sales. Self assessment should be done.
Who does? No one really. But if you make a lot from art dealing, or use it as a second income then you certainly want to do it, else you will be back paying tax for 5 years plus a fine if you get caught.
If you profit say 10k or less a year, you can probably not worry, any more and i would not risk it.
Speak to HMRC (they are very helpful on the phone) or talk to an accountant (its amazing how much free advice they give thinking you want to use their services) then decide if you need to declare it.
|
|
galaxy01
New Member
🗨️ 557
👍🏻 482
November 2016
|
Tax issues when selling art, by galaxy01 on Apr 28, 2018 9:41:51 GMT 1, I take it from your comment that you don't declare any capital gains then racket ? You've taken an interest in a comment that was throwaway. The annual allowance is about £12k, I'd say a lot on here would fall into that category.
If you have any type of job that 12k gets used up in your income tax? Or is there another 12k ctg allowance?
I take it from your comment that you don't declare any capital gains then racket ? You've taken an interest in a comment that was throwaway. The annual allowance is about £12k, I'd say a lot on here would fall into that category. If you have any type of job that 12k gets used up in your income tax? Or is there another 12k ctg allowance? |
|
|
|
RoboJ
Artist
Junior Member
🗨️ 1,202
👍🏻 1,332
Member is Online
July 2015
|
Tax issues when selling art, by RoboJ on Apr 28, 2018 10:24:59 GMT 1, People are fast to jump on the finger pointing when a company or wealthy individuals use tax loopholes to avoid paying tax, even if it’s legal. But when the shoe is on the other foot we’re very keen to pay as little as possible. Lol
I always like to sleep at night so if you need to declare it, declare it. If you know of a way to legitimately find tax efficiencies then great. Just don’t wave your moral finger when you hear of the wealthy doing it
People are fast to jump on the finger pointing when a company or wealthy individuals use tax loopholes to avoid paying tax, even if it’s legal. But when the shoe is on the other foot we’re very keen to pay as little as possible. Lol I always like to sleep at night so if you need to declare it, declare it. If you know of a way to legitimately find tax efficiencies then great. Just don’t wave your moral finger when you hear of the wealthy doing it |
|
iamzero
Full Member
🗨️ 9,190
👍🏻 8,545
May 2011
|
Tax issues when selling art, by iamzero on Apr 28, 2018 10:32:33 GMT 1, Hypocrisy everywhere. On this forum... surely not.
Hypocrisy everywhere. On this forum... surely not.
|
|
rebate
Junior Member
🗨️ 1,050
👍🏻 961
January 2018
|
Tax issues when selling art, by rebate on Apr 28, 2018 10:42:57 GMT 1, Im pretty sure when I read their site the other day it said
CGT is over and above your PAYE or self assessment rate.
the limit is £6k profit before you pay tax on it as a one off. If you are making the 6k from multiple sales or you do it more than once, you will be due to pay income tax on it as repetitive sales make you a dealer. (again this depends on what you used from your income tax allowance as that can be used against the profit too).
But I think the big problem here is that CGT seems to be a bit like a windfall thing. It works once, if you do it repetitively, your an art dealer.
Im pretty sure when I read their site the other day it said
CGT is over and above your PAYE or self assessment rate.
the limit is £6k profit before you pay tax on it as a one off. If you are making the 6k from multiple sales or you do it more than once, you will be due to pay income tax on it as repetitive sales make you a dealer. (again this depends on what you used from your income tax allowance as that can be used against the profit too).
But I think the big problem here is that CGT seems to be a bit like a windfall thing. It works once, if you do it repetitively, your an art dealer.
|
|
Hairbland
Junior Member
🗨️ 2,946
👍🏻 2,740
November 2010
|
Tax issues when selling art, by Hairbland on Apr 28, 2018 13:05:27 GMT 1, People are fast to jump on the finger pointing when a company or wealthy individuals use tax loopholes to avoid paying tax, even if it’s legal. But when the shoe is on the other foot we’re very keen to pay as little as possible. Lol I always like to sleep at night so if you need to declare it, declare it. If you know of a way to legitimately find tax efficiencies then great. Just don’t wave your moral finger when you hear of the wealthy doing it
I believe it is human nature to want to pay as little tax as possible, I know that here in the USA the idea of taxation essentially was a launching point.
Who determines one's fair share, other than self? In the US, is the fair rate 38%, or is it the average of 13% that those of wealth and means tend to pay? What about the close to 60% that pay zero tax? What about state-created lotteries that are a different form of taxing the poor to fund schools?
Easy subject for pontification.
People are fast to jump on the finger pointing when a company or wealthy individuals use tax loopholes to avoid paying tax, even if it’s legal. But when the shoe is on the other foot we’re very keen to pay as little as possible. Lol I always like to sleep at night so if you need to declare it, declare it. If you know of a way to legitimately find tax efficiencies then great. Just don’t wave your moral finger when you hear of the wealthy doing it I believe it is human nature to want to pay as little tax as possible, I know that here in the USA the idea of taxation essentially was a launching point. Who determines one's fair share, other than self? In the US, is the fair rate 38%, or is it the average of 13% that those of wealth and means tend to pay? What about the close to 60% that pay zero tax? What about state-created lotteries that are a different form of taxing the poor to fund schools? Easy subject for pontification. |
|
Chris JL
Junior Member
🗨️ 1,766
👍🏻 1,852
March 2017
|
Tax issues when selling art, by Chris JL on Apr 28, 2018 13:24:25 GMT 1, You MUST pay capital gain taxes if your total capital gains exceed your annual allowance.
Not doing it is shameful (but I guess that’s why bitcoin transactions are becoming popular on here).
You MUST pay capital gain taxes if your total capital gains exceed your annual allowance.
Not doing it is shameful (but I guess that’s why bitcoin transactions are becoming popular on here).
|
|
Deleted
🗨️ 0
👍🏻
January 1970
|
Tax issues when selling art, by Deleted on Apr 28, 2018 14:38:12 GMT 1, Tax is a big issue for everyone and my concern is what you actually get for it paying tax.....
Any asset disposed of in the UK is potentially liable for CGT - disposal is classed as selling or giving away or swapping it. Any assets disposed of for more than 6K GBP may be potentially liable for CGT
The capital gains tax allowance in 2018/19 is £11,700. This is the total amount in capital gains you can make this tax year before any tax is due. The actual amount of tax to be paid differs depending on your personal tax rate :
basic-rate taxpayers pay CGT at 10%
higher-rate taxpayers and additional-rate taxpayers pay CGT at 20%
Ways to potentially avoid tax or minimise any payments :
1. sell half on April 3rd/4th and the other half on April 6th so hence you will be utilize 2 years allowances
2. If the art is owned by you and your partner you can use both your annual allowances so 23400 GBP
3. Declare any associated costs of holding the art - insurance, framing, etc as these should be claimable
4. If you make losses on any other art purchases you can claim this amount against any gains made in the same tax year
5. Give the art to your partner/spouse as these gifts are normally exempt from CGT and then they can sell it and use their own allowances
There is something else called Entrepreneurs’ Relief but its hard to qualify for this. Basically if you do qualify you’ll pay tax at 10% on all gains on qualifying assets.
You should always consult a tax consultant/expert and HMRC are actually very good now to speak to and extremely helpful.
Tax is a big issue for everyone and my concern is what you actually get for it paying tax.....
Any asset disposed of in the UK is potentially liable for CGT - disposal is classed as selling or giving away or swapping it. Any assets disposed of for more than 6K GBP may be potentially liable for CGT
The capital gains tax allowance in 2018/19 is £11,700. This is the total amount in capital gains you can make this tax year before any tax is due. The actual amount of tax to be paid differs depending on your personal tax rate :
basic-rate taxpayers pay CGT at 10%
higher-rate taxpayers and additional-rate taxpayers pay CGT at 20%
Ways to potentially avoid tax or minimise any payments :
1. sell half on April 3rd/4th and the other half on April 6th so hence you will be utilize 2 years allowances
2. If the art is owned by you and your partner you can use both your annual allowances so 23400 GBP
3. Declare any associated costs of holding the art - insurance, framing, etc as these should be claimable
4. If you make losses on any other art purchases you can claim this amount against any gains made in the same tax year
5. Give the art to your partner/spouse as these gifts are normally exempt from CGT and then they can sell it and use their own allowances
There is something else called Entrepreneurs’ Relief but its hard to qualify for this. Basically if you do qualify you’ll pay tax at 10% on all gains on qualifying assets.
You should always consult a tax consultant/expert and HMRC are actually very good now to speak to and extremely helpful.
|
|
wrigs
New Member
🗨️ 497
👍🏻 417
July 2017
|
Tax issues when selling art, by wrigs on Apr 28, 2018 17:43:54 GMT 1, These issues are common. If you have a job and earn past your tax free allowance, you should technically declare anything you sell. Be it old shoes, a car or art. If you get profit from selling anything you should declare it. The types of product which you sell 2nd hand for a profit are few. But a lot of art does. So yes, you should declare all profit from art sales. Self assessment should be done. Who does? No one really. But if you make a lot from art dealing, or use it as a second income then you certainly want to do it, else you will be back paying tax for 5 years plus a fine if you get caught. If you profit say 10k or less a year, you can probably not worry, any more and i would not risk it. Speak to HMRC (they are very helpful on the phone) or talk to an accountant (its amazing how much free advice they give thinking you want to use their services) then decide if you need to declare it.
Okay with cars, classed as a wasting asset I.e. values tend to decline. Also okay with most mechanical items such as watches as classed as having a limited lifespan
These issues are common. If you have a job and earn past your tax free allowance, you should technically declare anything you sell. Be it old shoes, a car or art. If you get profit from selling anything you should declare it. The types of product which you sell 2nd hand for a profit are few. But a lot of art does. So yes, you should declare all profit from art sales. Self assessment should be done. Who does? No one really. But if you make a lot from art dealing, or use it as a second income then you certainly want to do it, else you will be back paying tax for 5 years plus a fine if you get caught. If you profit say 10k or less a year, you can probably not worry, any more and i would not risk it. Speak to HMRC (they are very helpful on the phone) or talk to an accountant (its amazing how much free advice they give thinking you want to use their services) then decide if you need to declare it. Okay with cars, classed as a wasting asset I.e. values tend to decline. Also okay with most mechanical items such as watches as classed as having a limited lifespan |
|
moron
Junior Member
🗨️ 2,711
👍🏻 1,051
September 2017
|
Tax issues when selling art, by moron on Apr 28, 2018 19:21:32 GMT 1, The more money people have as in millions and billions the less tax they pay, often zero.
Personally I think that people should have a massive tax revolt and tell the gov to raid the billionaires bank accounts the way the ancient Greeks did when they needed to raise money.
The more money people have as in millions and billions the less tax they pay, often zero.
Personally I think that people should have a massive tax revolt and tell the gov to raid the billionaires bank accounts the way the ancient Greeks did when they needed to raise money.
|
|
|
|
|
|
Tax issues when selling art, by Terry Fuckwitt on Feb 19, 2020 0:24:38 GMT 1, Tax is a big issue for everyone and my concern is what you actually get for it paying tax..... Any asset disposed of in the UK is potentially liable for CGT - disposal is classed as selling or giving away or swapping it. Any assets disposed of for more than 6K GBP may be potentially liable for CGT The capital gains tax allowance in 2018/19 is £11,700. This is the total amount in capital gains you can make this tax year before any tax is due. The actual amount of tax to be paid differs depending on your personal tax rate : basic-rate taxpayers pay CGT at 10% higher-rate taxpayers and additional-rate taxpayers pay CGT at 20% Ways to potentially avoid tax or minimise any payments : 1. sell half on April 3rd/4th and the other half on April 6th so hence you will be utilize 2 years allowances 2. If the art is owned by you and your partner you can use both your annual allowances so 23400 GBP 3. Declare any associated costs of holding the art - insurance, framing, etc as these should be claimable 4. If you make losses on any other art purchases you can claim this amount against any gains made in the same tax year 5. Give the art to your partner/spouse as these gifts are normally exempt from CGT and then they can sell it and use their own allowances There is something else called Entrepreneurs’ Relief but its hard to qualify for this. Basically if you do qualify you’ll pay tax at 10% on all gains on qualifying assets. You should always consult a tax consultant/expert and HMRC are actually very good now to speak to and extremely helpful. Does anyone know how you prove a piece of art is owned by you and your partner?
Receipts in your name or partners
Tax is a big issue for everyone and my concern is what you actually get for it paying tax..... Any asset disposed of in the UK is potentially liable for CGT - disposal is classed as selling or giving away or swapping it. Any assets disposed of for more than 6K GBP may be potentially liable for CGT The capital gains tax allowance in 2018/19 is £11,700. This is the total amount in capital gains you can make this tax year before any tax is due. The actual amount of tax to be paid differs depending on your personal tax rate : basic-rate taxpayers pay CGT at 10% higher-rate taxpayers and additional-rate taxpayers pay CGT at 20% Ways to potentially avoid tax or minimise any payments : 1. sell half on April 3rd/4th and the other half on April 6th so hence you will be utilize 2 years allowances 2. If the art is owned by you and your partner you can use both your annual allowances so 23400 GBP 3. Declare any associated costs of holding the art - insurance, framing, etc as these should be claimable 4. If you make losses on any other art purchases you can claim this amount against any gains made in the same tax year 5. Give the art to your partner/spouse as these gifts are normally exempt from CGT and then they can sell it and use their own allowances There is something else called Entrepreneurs’ Relief but its hard to qualify for this. Basically if you do qualify you’ll pay tax at 10% on all gains on qualifying assets. You should always consult a tax consultant/expert and HMRC are actually very good now to speak to and extremely helpful. Does anyone know how you prove a piece of art is owned by you and your partner? Receipts in your name or partners |
|
Winter
Junior Member
🗨️ 7,155
👍🏻 4,461
March 2007
|
Tax issues when selling art, by Winter on Feb 19, 2020 0:40:04 GMT 1, I’d imagine there are lots of people on here who don’t declare anything.
I’d imagine there are lots of people on here who don’t declare anything.
|
|
tab1
Full Member
🗨️ 8,519
👍🏻 3,679
September 2011
|
|
|
Rubberneck
Junior Member
🗨️ 1,050
👍🏻 1,433
October 2018
|
Tax issues when selling art, by Rubberneck on Feb 19, 2020 1:25:16 GMT 1, It’s worth noting that a print can be established as a shared asset between all family members. Your kids, ie ones who live with you and aren’t grown up, also have the same cgt allowance of £12000. They can also earn approx 18000 tax free with cgt allowance on top. So potential of £30000k per child per annum tax free.
The 6 figure sale of a £150 print can be split between all family members and over 2 years as mentioned above. You will likely need a deed of assignment or similar to establish the shared asset.
Ask for sales payments to be distributed directly to different family member accounts. Not giving your kids access to their own accounts is easier to justify with young ones. Not sure how long you leave the money in their accounts but guess it’s until the tax returns are done and approved by HMRC. I assume you would have to prove any spending from those accounts are done by them or for them ..ie investing in more art in their name.
There are many legal ways to reduce or eliminate tax so no point in breaking the law. For massive increases in capital gain an offshore trust might be the best solution.
Bank transfers of £10k and above are logged for money laundering £9999.99 and below aren’t.
Again treble check all info with accountancy professionals, don’t wing it..
It’s worth noting that a print can be established as a shared asset between all family members. Your kids, ie ones who live with you and aren’t grown up, also have the same cgt allowance of £12000. They can also earn approx 18000 tax free with cgt allowance on top. So potential of £30000k per child per annum tax free.
The 6 figure sale of a £150 print can be split between all family members and over 2 years as mentioned above. You will likely need a deed of assignment or similar to establish the shared asset.
Ask for sales payments to be distributed directly to different family member accounts. Not giving your kids access to their own accounts is easier to justify with young ones. Not sure how long you leave the money in their accounts but guess it’s until the tax returns are done and approved by HMRC. I assume you would have to prove any spending from those accounts are done by them or for them ..ie investing in more art in their name.
There are many legal ways to reduce or eliminate tax so no point in breaking the law. For massive increases in capital gain an offshore trust might be the best solution.
Bank transfers of £10k and above are logged for money laundering £9999.99 and below aren’t.
Again treble check all info with accountancy professionals, don’t wing it..
|
|
Rubberneck
Junior Member
🗨️ 1,050
👍🏻 1,433
October 2018
|
Tax issues when selling art, by Rubberneck on Feb 19, 2020 13:22:48 GMT 1, Any recommendations of accountants familiar with reducing tax liabilities specific to the art market would be appreciated.
Any recommendations of accountants familiar with reducing tax liabilities specific to the art market would be appreciated.
|
|
Deleted
🗨️ 0
👍🏻
January 1970
|
Tax issues when selling art, by Deleted on Feb 19, 2020 14:33:50 GMT 1, free tip - put your print in a shitty frame and hang it over the radiator in direct sunlight, then it can be classed as a wasting asset. eg likely to last less than 50 years. or perhaps artists should print on receipt paper then it can be classed the same.
free tip - put your print in a shitty frame and hang it over the radiator in direct sunlight, then it can be classed as a wasting asset. eg likely to last less than 50 years. or perhaps artists should print on receipt paper then it can be classed the same.
|
|
ashley123
New Member
🗨️ 48
👍🏻 16
October 2019
|
Tax issues when selling art, by ashley123 on Oct 22, 2021 9:24:16 GMT 1, I want to add my two cents. I do understand that nobody would openly state that he/she doesn't pay taxes. But there are many people who are just clueless about such things. My friend has recently faced issues with taxes. It turned out that she figured wrong. Of course, ignorance of the law is no excuse. So, she had to look for professional help and address Jackson Hewitt's tax service. Fortunately, they helped her to solve the problem, but she still had to pay the shortfall and a fine. Here is the jackson hewitt phone number if someone decides to address them. I shared this info in the hope it will be useful for someone. In my opinion, it is better to figure everything out and pay in a proper way than take a risk and worry all the time.
I want to add my two cents. I do understand that nobody would openly state that he/she doesn't pay taxes. But there are many people who are just clueless about such things. My friend has recently faced issues with taxes. It turned out that she figured wrong. Of course, ignorance of the law is no excuse. So, she had to look for professional help and address Jackson Hewitt's tax service. Fortunately, they helped her to solve the problem, but she still had to pay the shortfall and a fine. Here is the jackson hewitt phone number if someone decides to address them. I shared this info in the hope it will be useful for someone. In my opinion, it is better to figure everything out and pay in a proper way than take a risk and worry all the time. |
|
