Chattels and wasting assets for CGT

A gain on a chattel, meaning tangible moveable property, is exempt from capital gains tax if the proceeds are £6,000 or less. Above £6,000 the chargeable gain is capped at five thirds of the excess over £6,000, so the relief fades out at £15,000. Chattels with a predictable life of 50 years or less, which includes all machinery such as antique clocks and watches, are wasting assets and exempt altogether unless capital allowances were or could have been claimed on them.

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What counts as a chattel?

HMRC’s manual at CG76550 defines a chattel as tangible moveable property: something physical that can be moved without becoming part of a building. Items fixed permanently to a building are treated as part of it. GOV.UK gives jewellery, paintings, antiques, coins and stamps as typical examples, together with sets such as matching vases or chessmen.

Shares, cryptoassets and other intangible assets are not chattels. A private car is exempt under its own rule, and GOV.UK confirms you do not pay capital gains tax on your car unless you have used it for business.

How does the £6,000 exemption work?

Section 262(1) of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) says that a gain on a disposal of tangible moveable property is not a chargeable gain if the consideration does not exceed £6,000. The test is on the proceeds, not the gain, so a painting bought for £500 and sold for £6,000 is fully exempt. The limit applies per disposal, and for gifts or sales to connected persons the consideration is market value rather than the price paid.

For a jointly owned possession, GOV.UK says you are exempt on the first £6,000 of your share.

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How does marginal relief work above £6,000?

Section 262(2) caps the chargeable gain at five thirds of the amount by which the proceeds exceed £6,000. GOV.UK expresses this as subtracting £6,000 from the proceeds, multiplying by 1.667 and taxing the lower of that figure and the actual gain. HMRC’s manual at CG76577 notes that once proceeds reach £15,000 the cap is higher than the actual gain, so there is no relief.

Illustration only. Jo sells a painting for £9,000 that cost £3,000, ignoring selling costs.

Step	Amount
Actual gain (£9,000 less £3,000)	£6,000
Excess over £6,000 (£9,000 less £6,000)	£3,000
Cap: £3,000 multiplied by 5/3	£5,000
Chargeable gain (lower of £6,000 and £5,000)	£5,000

The £5,000 then joins Jo’s other gains for the year and the annual exempt amount; see how capital gains tax is calculated.

What happens if you sell a chattel at a loss?

Section 262(3) works in the other direction. If proceeds are below £6,000, the loss is computed as if you had received £6,000. HMRC’s manual at CG76590 draws the consequence: an asset bought for £6,000 or less and sold for less produces no allowable loss at all.

Illustration only. A piece of jewellery cost £10,000 and is sold for £4,000. The allowable loss is £10,000 less a deemed £6,000, which is £4,000 rather than £6,000. If proceeds exceed £6,000 there is no restriction. See claiming and using capital losses for how to register it.

How are sets of items treated?

Without a special rule, a valuable set could be split and sold piece by piece for £6,000 or less each. Section 262(4) stops this. Where two or more items forming part of a set, all owned at one time by one person, are disposed of to the same person, or to people acting in concert or connected with each other, whether on the same or different occasions, the disposals are treated as one disposal of a single asset with one £6,000 limit.

HMRC’s view at CG76632 is that items form a set only if they are essentially similar and complementary and are worth more together than separately. Being sold in one auction lot does not by itself make items a set. GOV.UK gives chessmen, books by the same author, matching vases and sets of china as examples, and confirms that parts of a set sold to different, unconnected people for less than £6,000 each are not taxed.

HMRC’s example at CG76638 involves the black pieces of an antique chess set sold for £5,000 and the white pieces sold two days later to the first buyer’s sister for £5,000. Because the buyers are connected, the two sales are one disposal for £10,000, and marginal relief rather than the full exemption applies.

What is a wasting asset?

Section 44 defines a wasting asset as one with a predictable life not exceeding 50 years. For tangible moveable property, life means useful life, judged by the purpose for which the owner acquired the item and as known when it was acquired. Plant and machinery is always treated as having a life of less than 50 years, whatever its real age.

That last rule produces results that surprise people. HMRC’s manual at CG76873 says antique clocks and watches are always wasting assets because they are machinery, and CG76721 says all animals are wasting assets. Paintings, furniture and jewellery normally have a useful life well beyond 50 years and are not wasting assets.

Why are wasting chattels often exempt?

Section 45(1) says no chargeable gain accrues on the disposal of tangible moveable property that is a wasting asset. A collector who sells an antique clock for £50,000 at a large profit therefore usually has no capital gains tax to pay, even though the £6,000 chattels limit is far exceeded.

The exemption is lost under section 45(2) if the item was used solely for a trade, profession or vocation throughout ownership and capital allowances were or could have been claimed, or if the expenditure otherwise qualified in full for capital allowances. With partial business use, section 45(3) splits the proceeds and cost and only the business part is chargeable. CG76721 adds that a loss on a wasting chattel is allowable only where capital allowances were or could have been claimed. For the allowances themselves, see capital allowances explained.

What mistakes come up most often?

Splitting a set between the same buyer, or buyers who are related, to stay under £6,000 each time.
Treating every antique as a wasting asset, when only machinery such as clocks and watches automatically qualifies.
Claiming a loss on a wasting chattel or a chattel bought for £6,000 or less.
Using the price received on a gift or a family sale instead of market value.
Forgetting that business use with capital allowances removes the wasting asset exemption.

Valuations matter less than people think when the item is plainly under £6,000, but keep purchase records and any valuation for higher value items in case HMRC asks; see allowable costs for capital gains.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 8 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.