CG76577 - Chattels: exempt and chargeable gains: marginal relief
TCGA92/S262 (2)
If the consideration for the disposal of a chattel (tangible moveable property) is greater than 拢6,000, the chargeable gain may be restricted.
When a chattel is disposed of for more than 拢6,000 you calculate the difference between the disposal consideration and 拢6,000 then multiply that difference by 5/3. The answer is the maximum chargeable gain.
If the actual chargeable gain exceeds that amount, you exclude the excess and assess the smaller amount. If the actual chargeable gain is less than that amount, you assess the actual gain.
If the disposal consideration is 拢15,000 or more, the maximum chargeable gain exceeds the actual chargeable gain and no marginal relief is available.
Example
Miss S sells an antique mirror for 拢7,500. Her chargeable gain after allowing expenses is 拢4,000.
As the disposal consideration exceeds 拢6,000, the gain is not exempt but marginal relief is due.
First calculate the difference between the disposal consideration and 拢6,000:
| 听 | 拢 |
|---|---|
| consideration | 7,500 |
| less | 6,000 |
| excess | 1,500 |
The chargeable gain is the lesser of:
- 拢1,500 x 5/3 = 拢2,500
or
- the gain before marginal relief = 拢4,000
SO THE CHARGEABLE GAIN 拢2,500
NOTE Companies and other concerns within the charge to Corporation Tax may be able to claim indexation allowance, see CG17207 onwards.