Glossary · UK
What is Chattel (CGT)?
A physical moveable asset. Chattels sold for £6,000 or less are exempt from Capital Gains Tax. Between £6,000 and £15,000, CGT is limited to 5/3 of the excess over £6,000.
Full Definition
A chattel is a tangible, moveable asset — for example antiques, jewellery, artwork, gold coins, vintage cars, or racehorses. For Capital Gains Tax (CGT) purposes, chattels are divided into two categories: wasting and non-wasting. A wasting chattel has a predictable useful life of 50 years or less. Most plant and machinery — including cars — falls into this category and is entirely exempt from CGT on disposal. Non-wasting chattels (those with an expected useful life exceeding 50 years) such as antiques, paintings and gold coins are subject to CGT when sold, but benefit from two important reliefs. First, if the gross sale proceeds are £6,000 or less, the gain is fully exempt. Second, where proceeds fall between £6,000 and £15,000, the taxable gain is capped by the marginal relief formula: the maximum chargeable gain cannot exceed five-thirds of the excess of the sale proceeds over £6,000. For example, if an antique is sold for £9,000, the cap is 5/3 x (£9,000 - £6,000) = £5,000. If the actual computed gain is lower, that lower figure is used. The sets rule applies where individual items forming part of a set (such as six matching chairs) are sold to the same buyer or connected parties — the sale is treated as a single transaction and the £6,000 threshold applies to the total, not each item individually. Losses on wasting chattels are not allowable. The chattel exemption and marginal relief interact with the CGT annual exempt amount: the annual exempt amount reduces the gain after applying marginal relief.