Posted by Nick Day on 21 Jun 2012
Are you thinking of selling your Olympic Torch?
HM Revenue and Customs (HMRC) have announced that there could be potential tax consequences that may be incurred from Olympic Torch sales.
In total, 8,000 torchbearers will carry individual torches across the UK and they have all been offered the opportunity to purchase their torch at a reduced rate.
If you are a lucky owner of a torch and decide to sell it for less than £6,000 you will not have to pay Capital Gains Tax (CGT) on any profit. If it raises more than £6,000 then you will have a chargeable gain and may have to pay CGT if you have other gains in the tax year.
Depending on the amount received, you may incur a CGT charge even if you sell a torch and give the proceeds to charity through the charitable Gift Aid scheme. However, for every £100 donated, the charity can reclaim £25 from HMRC.
If you donate your torch to a charity rather than sell it there will be no charge to CGT.
It is also important to stress that depending on your overall circumstances and other activities selling a torch might mean that it is considered part of a trade you are operating and therefore you could be liable for income tax rather than CGT.
One Olympic Torch was reputably sold on eBay for in excess of £150,000 just a day after the first stage of the relay and it is understood that the money raised will be used for a community gardening project. Over 30 other auctions appear to have taken place but it seems that some torchbearers have decided to choose proceeds over charity.
If you need help with this issue or your personal tax affairs in general, please contact us on 01962 856 990 or firstname.lastname@example.org to discuss your individual requirements.
- Overseas Pension Changes 6 April 2017
- Top 10 Expat Tax Tips for Individuals Moving to the UK
- Property Partnership Incorporation and SDLT
- Tax Relief For Residential Mortgages
- UK Self Assessment Tax Return Filing and Penalties