There are a number of personal assets that you can sell without a risk that you are creating a CGT liability. They include:
- your car
- individual personal possessions worth up to £6,000 each, such as jewellery, paintings or antiques
- stocks and shares you hold in tax-free investment savings accounts, such as ISAs and PEPs
- UK Government or 'gilt-edged' securities, for example, National Savings Certificates, Premium Bonds and loan stock issued by the Treasury
- betting, lottery or pools winnings
- personal injury compensation
- foreign currency you bought for your own or your family's personal use outside the UK
Personal possessions that you dispose of for more than £6,000 are potentially subject to CGT unless both of the following apply:
- The asset you are selling is a wasting asset – i.e. has a predicted life of 50 years or less, and
- The asset has not been used in your business.
Sometimes an asset that would normally be liable to CGT (for example a piece of jewellery worth over £6,000) is lost or destroyed. If you receive an insurance payout or other sum for the item, you're treated as disposing of the asset for CGT purposes.
If you receive more in the insurance payout than the asset's value when you acquired it, the difference between the two may be liable to CGT.
A further complication can arise if you sell a number of personal possessions as a set. Generally, a set is worth more as a set than if the component parts are sold separately.
If you sell or dispose of personal possessions as a set, the £6,000 limit applies to the set as a whole.
If you sell parts of a set to the same person in separate sales, the £6,000 limit still applies to the set as a whole. You cannot apply the limit separately to each sale.