misca
New Member
Posts • 45
Likes • 85
February 2020
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Net gain selling a print?, by misca on Sept 20, 2020 22:21:22 GMT 1, Hi,
Seeing the latest auction results that Bansky is getting, I am not trying to sell but I am interested in understanding how sales work. If this topic has been previously discussed, my apologies, but I have not been able to find simple information.
The next reflection is to know when we see an auction price what is the real profit for the buyer. Depending of course on which country you live you will have one legislation or another, depending aution house, etc, but it is a reflection to have an approach.
Let's say you own your print that you bought for 1k and it gets a hammer price of 100k in the last auction. What is the benefit that you would have achieved? From the price of 100k we add the BP, 26% and the ARR, 4% ... 100 + 26 + 4 = 130k. To this we add the VAT ... 20% ... 130 + 26 = 156k.
Of the 100k auction they charge you the sale commission 5%? Plus shipping costs, etc ... let's say 6k. In this examaple you get 94k of a paid price of 156k. Of those 94k – 1k you have to pay the capital gains, depending on the country let's say 25% ... 23k.
94-23 = 71k. In other words, with a market value of 156k (what someone is willing to pay) you get 71 (45%). Or what is the same, 70% of the auction price or 50% of the auction price + BP.
If you sell directly without going through an auction, any sale greater than 94k will be positive for you (and obviously for the buyer), ignoring all the advantages / disadvantages that one system has over another, since I understand that neither BP nor ARR, nor VAT would be applied?
I am right? Someone with more experience who can add more information about commissions,taxes, etc.
Sorry again if this topic has been discussed but just would like to know how much worth is hanging on the wall and how art sales works.
Hi,
Seeing the latest auction results that Bansky is getting, I am not trying to sell but I am interested in understanding how sales work. If this topic has been previously discussed, my apologies, but I have not been able to find simple information.
The next reflection is to know when we see an auction price what is the real profit for the buyer. Depending of course on which country you live you will have one legislation or another, depending aution house, etc, but it is a reflection to have an approach.
Let's say you own your print that you bought for 1k and it gets a hammer price of 100k in the last auction. What is the benefit that you would have achieved? From the price of 100k we add the BP, 26% and the ARR, 4% ... 100 + 26 + 4 = 130k. To this we add the VAT ... 20% ... 130 + 26 = 156k.
Of the 100k auction they charge you the sale commission 5%? Plus shipping costs, etc ... let's say 6k. In this examaple you get 94k of a paid price of 156k. Of those 94k – 1k you have to pay the capital gains, depending on the country let's say 25% ... 23k.
94-23 = 71k. In other words, with a market value of 156k (what someone is willing to pay) you get 71 (45%). Or what is the same, 70% of the auction price or 50% of the auction price + BP.
If you sell directly without going through an auction, any sale greater than 94k will be positive for you (and obviously for the buyer), ignoring all the advantages / disadvantages that one system has over another, since I understand that neither BP nor ARR, nor VAT would be applied?
I am right? Someone with more experience who can add more information about commissions,taxes, etc.
Sorry again if this topic has been discussed but just would like to know how much worth is hanging on the wall and how art sales works.
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dueuomo
New Member
Posts • 636
Likes • 786
January 2014
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Net gain selling a print?, by dueuomo on Sept 21, 2020 0:34:12 GMT 1, You pay Vat only on buyer premium
You pay Vat only on buyer premium
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JAlternatión
Junior Member
Posts • 1,268
Likes • 963
December 2011
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Net gain selling a print?, by JAlternatión on Sept 21, 2020 9:44:06 GMT 1, In the UK you pay Capital Gains Tax at 20% above 12.3k allowance. You may be able to use a partner's CGT allowance too to make it 24.6k free. The 20% assumes you pay higher rate tax and may be lower if you don't, but I'm going to make that assumption for this.
In your example, you would end up paying CGT on £81.7k, so would pay £16.32k. So, post tax you would have £77.68k.
All of this assumes that you paid nothing for the print. If you have paid 20k, you need to deduct that as it is not part of the gain.
In the UK you pay Capital Gains Tax at 20% above 12.3k allowance. You may be able to use a partner's CGT allowance too to make it 24.6k free. The 20% assumes you pay higher rate tax and may be lower if you don't, but I'm going to make that assumption for this.
In your example, you would end up paying CGT on £81.7k, so would pay £16.32k. So, post tax you would have £77.68k.
All of this assumes that you paid nothing for the print. If you have paid 20k, you need to deduct that as it is not part of the gain.
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JockoLad
New Member
Posts • 740
Likes • 1,031
February 2007
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Net gain selling a print?, by JockoLad on Sept 21, 2020 10:08:32 GMT 1, In the UK you pay Capital Gains Tax at 20% above 12.3k allowance. You may be able to use a partner's CGT allowance too to make it 24.6k free. The 20% assumes you pay higher rate tax and may be lower if you don't, but I'm going to make that assumption for this. In your example, you would end up paying CGT on £81.7k, so would pay £16.32k. So, post tax you would have £77.68k. All of this assumes that you paid nothing for the print. If you have paid 20k, you need to deduct that as it is not part of the gain.
I am a lower bracket tax payer but my partner is in the higher bracket. If we combine our allowance is it an automatic 20% or can I use the rest of my tax allowance at 10% and then pay the rest at 20%?
Does that even make sense?
In the UK you pay Capital Gains Tax at 20% above 12.3k allowance. You may be able to use a partner's CGT allowance too to make it 24.6k free. The 20% assumes you pay higher rate tax and may be lower if you don't, but I'm going to make that assumption for this. In your example, you would end up paying CGT on £81.7k, so would pay £16.32k. So, post tax you would have £77.68k. All of this assumes that you paid nothing for the print. If you have paid 20k, you need to deduct that as it is not part of the gain. I am a lower bracket tax payer but my partner is in the higher bracket. If we combine our allowance is it an automatic 20% or can I use the rest of my tax allowance at 10% and then pay the rest at 20%? Does that even make sense? |
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JAlternatión
Junior Member
Posts • 1,268
Likes • 963
December 2011
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Net gain selling a print?, by JAlternatión on Sept 21, 2020 11:21:11 GMT 1, I am a lower bracket tax payer but my partner is in the higher bracket. If we combine our allowance is it an automatic 20% or can I use the rest of my tax allowance at 10% and then pay the rest at 20%? Does that even make sense?
(just remember to put in the gain, not final value)
I am a lower bracket tax payer but my partner is in the higher bracket. If we combine our allowance is it an automatic 20% or can I use the rest of my tax allowance at 10% and then pay the rest at 20%? Does that even make sense? It does make sense, but i have no idea. I think you have to prove that you jointly own the item to claim a partners allowance. This calculator should help (select 'other') to establish what you may pay on lower rate income taxscouts.com/calculator/capital-gains-tax/(just remember to put in the gain, not final value) |
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dotdot
Junior Member
Posts • 3,645
Likes • 1,025
December 2006
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Net gain selling a print?, by dotdot on Sept 21, 2020 14:57:40 GMT 1, depends very much on who you are talking to.
take it you want to hear something nice - .... hire an advisor or get prof advice.
alt - if you want to keep it simple - don't tell anyone.
alt - ask hmrc for advice - you'll not be on the phone for long - "joke".
alt - you may hear the word "thief ! " - now that might be you , your advisor or the hmrc.
tax is a murky subject - not like festival - that is a print.
also if it's hanging on your wall there's a tax.
wall tax - that is ... the risk you run if it is worth > 10k and it falls off.
i know a chap who ... once i told him the value of his gwb he literally levitated into the air and fell off his chair. ( i jest you not i have witnesses ..)
later that day - his print came off the wall - and went under the bed....
gsoh is required also when talking about tax... stay cool and carry on.
.. 
depends very much on who you are talking to. take it you want to hear something nice - .... hire an advisor or get prof advice. alt - if you want to keep it simple - don't tell anyone. alt - ask hmrc for advice - you'll not be on the phone for long - "joke". alt - you may hear the word "thief ! " - now that might be you , your advisor or the hmrc. tax is a murky subject - not like festival - that is a print. also if it's hanging on your wall there's a tax. wall tax - that is ... the risk you run if it is worth > 10k and it falls off. i know a chap who ... once i told him the value of his gwb he literally levitated into the air and fell off his chair. ( i jest you not i have witnesses ..) later that day - his print came off the wall - and went under the bed.... gsoh is required also when talking about tax... stay cool and carry on. .. |
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