HMRC concerns, private seller but moderate turnover over two decades.

[bailey2agd]

I joined eBay in 2002 finding a collectors world I could only previously dream of and quickly run up credit cards to tens of thousands buying diecast cars from my childhood in the 60’s.

Of course I had to sell them again a couple of years later. I found that selling on ebay is harder than buying, the price is almost always less than you paid.  (I’m still paying off those card debts).  Over the last 15 years I rebuilt my collection taking care to pay only cash and I have close to a thousand mint, boxed toys and still adding occasionally . I also have a huge, high value stamp collection, a life long passion.  I sell off stuff i no longer want or perhaps if i find a better example to replace one i have.  As i come up to retirement and having a reality check with my partners health I’ve decided to liquidate all these superfluous belongings. This could be a six figure sum. These are my own personal possessions, I haven’t got receipts, surely i’m entitled to sell them without tax? I’m worried i’m going to get in trouble or just have to keep them when i’d rather use the money to enjoy our retirement. 

[jokers_toybox]

I'm not a tax expert, but if you end up profiting (dunno how you or HMRC could prove/deny that) it very much sounds with that much cash you may enter capital gains territory, I'd try and get some advice from an accountant because 6 figures is VAT registerable 

[porte2425]

Technically, if they are your personal possessions, you’ve owned them for some time, and you never bought them with the intention to sell on for profit, then you should be permitted to sell them without being taxed (assuming the profit from any single possession isn’t £6,000 or more), and without needing to register as a business. However, eBay may not see it that way. As for HMRC, for a 6-figure total, you really should speak with them, or with an accountant or solicitor. (For example, there is a clause that some items may be deemed part of a set, and therefore together will count as a single possession. And I’m sure there are more issues.) Do not solely take the advice from strangers on this forum on this matter – that’s a big risk!

[jokers_toybox]

Yup, 1 Expert whose job it is to deal with this Vs. a bunch of randoms on the internet.

There's a clear winner

[bailey2agd]

i had a look on HMRC website. Capital gains is only potentially payable on single objects with a value in excess of £6000.

It also says that you won’t have to pay tax on items bought for your own use or personal possessions so as far as i can see that’s what i’m selling now and in the future.

[jokers_toybox]

It's just if they decide your collection is 1 item, I'd give them a call for clarification, because I've seen 2 tax inspections on friends, where HMRC just decided they owed tax, 1 got sorted after they went through all his records, the other ended up in court with them trying to claim 250k of unpaid tax, again luckily he won his case as he was honest, but the stress nearly killed him.

It's not something I'd recommend just hoping for the best on

[porte2425]

It’s a single possession, not object – and items can be seen as part of a set, and therefore together be classed as a single possession. With this kind of thing, legal terminology matters; and non-experts attempting to interpret what they read to match what they want it to mean can be dangerous. For a six-figure total seek professional guidance!

[jokers_toybox]

Yeah this is my feeling if they decide they want money, it's not  1000s of toys cars it's a singular collection.

[the_book_seekers]

For the tax year 2024 to 2025 the capital gains figure for a single item will be £3000.

[magpiecorner1]

An interesting question.

Your collections are chattels, and the sale of chattels are subject to capital gains tax.

First, your toy cars: mechanical items such as cars and clocks are considered 'wasting chattels' as they are deemed to have a limited life.  Just as you can sell a full size car collection either individually, in pairs, or as a complete set, and pay no tax, the same exemption applies to mechanical toys.  So you can dispose of these as and when you wish, with no tax implications.  I would though keep records as you may be asked to explain cash received, especially from online sites such as eBay, as sales over 30 items or £1700 will be reported.  Though this will make no difference to your tax position.  See CH76876 in the HMRC manual on the HMRC website for details.

Stamps are interesting too.  Apparently, according to CG76883, a stamp collection isn't considered a 'set' when selling in the same way a chess set would be.  Though, to be in the safe side, might be worth checking with HMRC if you are thinking of selling as one lot.  But certainly if you are thinking of selling in a number of lots, you can avoid CGT.

The Capital Gains tax Threshold for the current year is £3000 for an individual item or set (sets, for stamps, could be commemorative sets or a bundle).    You could quite happily sell 10 sets at £2500 in a tax year are be due no tax,  however, sell the whole lot in one go at £25,000 and your profit less the £3000 allowance (after sales costs) will be taxed at basic or higher rate depending on your own tax circumstances, that is, whether or not you are a basic or higher rate taxpayer 

If you have documents ie credit card slips to show the purchases - eBay records goes back 3 years or so - worth digging them out if you are selling lots that pass the threshold,  as purchases are deducted from profits before tax.

So basically, no tax on toys, and split the stamps into lots that will sell for under £3000 per lot.

Best of luck, I hope you have a few sleepers that go for prices which surprise you, especially in the car collection!  And heed my advice about keeping records of your sales, HMRC like paper trails 

And if it makes you rich, invest in classic cars or watches, I can see Ms Reeves removing the allowances altogether 

[sml192]

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@jokers_toybox wrote:

Yeah this is my feeling if they decide they want money, it's not  1000s of toys cars it's a singular collection.

---

HMRC will only consider it as a singular collection (set) for Capital Gains Tax if sold to the same person.

CG76876 - Chattels: models and toys

TCGA92/S262 and TCGA92/S45

Chattels exemption

Models and toys are chattels (tangible moveable property) so disposals for £6,000 or less will be exempt under TCGA92/S262, see CG76573. If models and toys are disposed of to the same person then they may form a set, see CG76631 onwards for more details.

[sml192]

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@the_book_seekers wrote:

For the tax year 2024 to 2025 the capital gains figure for a single item will be £3000.

---

The threshold at which a single item or collection (set) is liable for CGT is still £6,000.  The annual allowance for CGT is £3,000.

[sml192]

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@magpiecorner1 wrote:

The Capital Gains tax Threshold for the current year is £3000 for an individual item or set

---

The threshold for an individual item or set is still £6,000 not £3,000.

[sml192]

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@bailey2agd wrote:

i had a look on HMRC website. Capital gains is only potentially payable on single objects with a value in excess of £6000.

It also says that you won’t have to pay tax on items bought for your own use or personal possessions so as far as i can see that’s what i’m selling now and in the future.

---

The items you intend selling are, as you say, peronal possessions and you should not, therefore, need to pay any tax.  However, you do need to be aware of HMRC's 9 badges of trade.  The following link provides a good overview:

https://www.menzies.co.uk/hmrc-badges-of-trade/

[magpiecorner1]

According to the HMRC website, the allowance for 24/25 is £3000.

We are in the tax year 24/25.

[jokers_toybox]

And all these conflicting replies just proves my point of proper expert advice Vs. People on the Internet 

[game_raid]

The new year doesn't start until April when the new CGT limit will be changed to £3000 but not on a personal item.

[sml192]

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@magpiecorner1 wrote:

According to the HMRC website, the allowance for 24/25 is £3000.

We are in the tax year 24/25.

---

Yes, the annual allowance for Capital Gains Tax is now £3,000 (previously £6,000) but the threshold at which the sale of a personal item/collection becomes liable for Capital Gains Tax is still £6,000. They are 2 different things.

For each item/collection sold for £6,000 or more you need to calculate the gain - Sale amount less the original cost of the item and any allowable expenses (which can relate to both the sale and the original acquisition).

At the end of the year you need to add up all the gains, deduct any allowable losses, and then deduct the annual allowance of £3,000 in order to arrive at the taxable amount.

https://www.gov.uk/capital-gains-tax/work-out-need-to-pay

[magpiecorner1]

You have contradicted yourself.

The current tax year is 24/25, as your stated

'the 2024 to 2025 tax year starts on 6 April 2024 and ends on 5 April 2025'

today is 1 February 2025.

[magpiecorner1]

Its very confusing, but not two diffent things.

Not because there is a 'threshold' and also an 'allowance' but because HMRC haven't updated their site properly. 

The words 'threshold' 'allowance' and 'exemption' are all used to described the AEA - the annual exempt amount, which is currently £3000, down from £6000 in the 23/24 tax year.

This is the amount of profit that can be made on an individiual item or set before tax is charged.  There is no separate threshold of £6000.  Though reading some parts of the HMRC website you would  be forgiven for thinking that.   I found at least half a dozen examples of £6000 being stated as the AEA on the HMRC website.

So no, if you sold something for £4500 and made over £3000 profit, there will  be tax to pay unless your personal allowance is not exceeded by other taxation and if it is not co-owned item and it will need to be reported. 

Considering that ignorance of tax is not an excuse for not paying it, HMRC certainly shoot themselves in the foot by not properly updating their site.  But if you sell something for £5000 profit, for instance, in the 24/25 tax year, its has to be declared.  There will, of course be no tax to pay if it is a 'wasting chattel' - HMRC chose to call this an exemption as well.

Badly done by HMRC, so always worth checking with them - in writing - before making major sales and also worthwhile declaring monies even if they are exempt from tax.