Keir Starmer's definition of working class

It is impossible to have system that is absolutely fair to everyone because peopl'es circumstances can be so different. The best that we can expect is a system that is consistent, that provides for the vast majority of people, but where a few people do get badly done by.

I lost 5 years pension because I worked part time at a time when pension schemes did not expect part timers, I had a personal pension with one company which when I ceased contributing froze the amount it was worth. Shortly afterwards the law changed and such pensions had to grow with the value of the underlying assets. In 2003, the value of the pension was no more than it was in 1968, despite the assets being invested for nearly 40 years.

Things like this will happen. If someone is contracted out it means that the amount of money is invested in the company scheme not the state scheme, so being contracted out should not affect the size of you pension in total, just its ditribution between state and occupational pension. My pension comes almost entirely from a scheme where I was contracted out through out the time I was contributing.

However, people do need to accept that they need to keep themselves up to date on personal financial matters, whether it is checking their bank statements every month to understanding the rudiments of how the pension system works. For example when I married at 24 I knew better than to opt to pay the reduced married womans NI stamp, as it was then, which means I have a much higher state pension now than I would have had had I payed the lower rate.

I cannot remember what I paid for a painting I bought nearly 60 years ago nor do I have the receipt.

It could be worth a fortune now (but probably not).

Callistemon213

Me too, ronib.

After all, if selling a property one owns, CGT is only liable if it has not been your main residence for a period of time.

How would anyone calculate the CGT owed anyway? How is the appreciation in value calculated on something which had such a variable price over the years?

It's the actual purchase price and the actual selling price, when the gain is realised. Fluctuations in value are irrelevant.

MaizieD

And a work of art may well be a personal possession. I'm sure most art owners would claim that they are.

If the gain is high enough then you pay CGT. It is on the gain and not on the proceeds. If it's an inherited item then the base price is a valuation at the time of acquisition,

ronib

I am a bit confused by the idea that CGT should be paid on the profit from chattels because presumably the initial purchase was made from taxed income?

Also if profits are taxed, then how about offsetting losses on items purchased which have devalued?

You can deduct capital losses. Someone selling a tranche if shares for less than they paid will make a loss which will be set off against other gains or carried forward for future use. It's rather more complicated than the above you get the picture.

There are also rules and exemptions on the sale of chattels.

Germanshepherdsmum

I’m not getting into an argument about what is and is not fair. I merely stated that if an item has risen in value that rise may be taxable however you acquired the item, and that people who live off rental income pay taxes. Those are facts and I prefer facts to philosophy.

I didn't ask you to . I merely answered your question about what you see as my 'problem'.

I've a number of Beswick Beatrix Potter figures, but I doubt they'll put me. into the CGT bracket 😆

£75 on Ebay ☹

MaizieD

If the sale nets more than £12,300 profit then it's subject to CGT. Which is far from likely to happen so why are people getting so invested in this?

Well, you never know.

Just off to check MIL's Beswick flying ducks, languishing in a box in the attic.

I’m not getting into an argument about what is and is not fair. I merely stated that if an item has risen in value that rise may be taxable however you acquired the item, and that people who live off rental income pay taxes. Those are facts and I prefer facts to philosophy.

Germanshepherdsmum

I’m sorry Doodledog, but a taxable profit is a taxable profit no matter how or where the item was acquired. If you die owning such items they will form part of your estate for IHT purposes and your executor may have to cough up 40% of their full value. There are no exceptions, nor should there be - but you do have an annual allowance before you have to pay CGT.

People who live on rents pay income tax just as though they were employed - there are few deductions before tax nowadays. They have the same meagre threshold before they have to pay income tax, and when they sell their rental property they will have to pay CGT. What is your problem with people who aren’t in the PAYE system?

I know taxable profit is the same - I just think that (to me) there is a difference between a serendipitous find in a car boot sale (or whatever) and a business transaction, although I appreciate that they have the same legal status.

The 'problem' I have with people not working is that they are not contributing goods or services, and even if they do pay tax it is not at the same rate as those on PAYE. Such is life, but each time there is a rise in the tax rate, or a change in the nil rate band it is 'workers' who carry the can. That's what I believe KS meant when he talked about not increasing taxes for 'working people', and if so I applaud him. That's all I am saying, really. Those in work have to pay to support those who can afford not to.

Person A hasn't worked since she married, yet loves to hold forth about how taxpayers' money is being spent, how pensioners should pay NI if they continue to work beyond SPA etc. She and her husband arrange their finances so that he pays less on his income tax by using up her tax allowance, she got NI paid when her children were younger, paid the pension part only of NI (voluntary pension contributions) when the freebies stopped so now gets a full pension, but has contributed nothing towards education, NHS etc, from which both she and her children have benefited.

Meanwhile, there are women who have worked for decades who don't qualify for full pension because their income was too low, they didn't make enough full years because of childcare in school holidays or who were contracted out without their knowledge.

Person B was left poor after her marriage broke down when she had pre-school children. She got her share of the equity in the family home but means-testing meant that she couldn't get any help until she had spent it, so ended up with no money behind her, and had to take a low paid job that she could fit around her children when they started school. She paid tax for over 40 years, but was contracted out and didn't always earn enough to get a full year's NI contributions, so her State pension is not full. She has a very small occupational pension which takes her to just over the tax threshold when combined with the State Pension, so she will pay tax for the rest of her life, unlike Person A who will continue to live tax free.

To add insult to injury Person B had to work and pay tax until she was 66, whereas Person A stopped her partial NI contributions at 60 when a combination of the free ones and the partial ones added up to 35 years, yet all of us are told that the reason for the extra years is that the ageing population (including Person A) means that there is not enough money in the system to pay for working people to get the pensions they have paid into when they were told they would get them.

Is any of that fair?

I’m sorry Doodledog, but a taxable profit is a taxable profit no matter how or where the item was acquired. If you die owning such items they will form part of your estate for IHT purposes and your executor may have to cough up 40% of their full value. There are no exceptions, nor should there be - but you do have an annual allowance before you have to pay CGT.

People who live on rents pay income tax just as though they were employed - there are few deductions before tax nowadays. They have the same meagre threshold before they have to pay income tax, and when they sell their rental property they will have to pay CGT. What is your problem with people who aren’t in the PAYE system?

If the sale nets more than £12,300 profit then it's subject to CGT. Which is far from likely to happen so why are people getting so invested in this?

Taxing profit on Antiques Roadshow-style charity shop finds would be a step too far for me, as would charging people if their engagement ring is worth more than it used to be, or a collection of old dolls has become valuable. There are too many variables and personal possessions should be just that. My feelings on means-testing of that sort are well documented on here.

It’s the fact that workers have all of their income above the meagre threshold taxed, have to satisfy strangers that spending in older age is not deprivation of assets and so on, when those who inherit enough to live on, or who live on rents or the interest on capital pay a smaller portion of their money that is unfair.

Someone dealing in antiques, or when the charity shop Rembrandt forms part of an estate is very different from Mrs Ordinary striking lucky and selling her one-off bargain buy.

VAT is only chargeable by a VAT business. That’s unlikely to be your local charity shop or car boot seller.

Mollygo

If I buy chattels from a charity shop, or, from a car boot sale, I don’t expect to pay VAT on it because that has already been paid by the initial purchaser.
If I buy from an auction, I already have to pay a service fee. Do you think we ought to pay VAT on those goods too?
Would you like to see VAT added on household effects for probate calculations?

I think you have taken my post too literally.

VAT was just an exemplar tax for the purpose of asking ronib a question relevant to her 'double taxation' argument.

Other taxes are available

In practice they are lumped together and there is rarely any need to resort to a definition (assuming you don’t have a cellar stacked with fine wine!).

Germanshepherdsmum

Goods are things you consume, chattels are all other personal possessions Doodledog.

Ah, thanks. They are so often used together that I didn't know there was a defined difference in meaning these days.

Callistemon21
According to a friend who was left to clear his parents' house not long ago everything had to be listed. All goods, all chattels.

I'd never heard of that before.
Neither had I until I had to do it. Fortunately, it wasn’t like insurance where you have to give what it would cost to replace items now.

Of course. Why would it be in doubt? It might be a piece of jewellery, a piece of furniture, a picture, a car, any possession which has increased in value since its acquisition.

So have we now established that CGT can be paid on 'chattels' (personal property)?

What else would it be? It’s personal property, not real property. Unless perhaps it’s a Banksy mural.

And a work of art may well be a personal possession. I'm sure most art owners would claim that they are.

Goods are things you consume, chattels are all other personal possessions Doodledog.

Capital gains tax on the sale of art

In the United Kingdom, capital gains tax applies to the sale of art if the proceeds exceed the annual exemption threshold. As of the current tax year (2022/2023), the annual exemption stands at £12,300. This means that if your total capital gains from selling art in a tax year exceed this threshold, you are liable to pay tax on the excess amount. Being aware of this exemption threshold is vital for planning your art sales strategically and minimizing your tax liability.

www.roseberys.co.uk/probate-estates-insurance-valuations/what-are-the-capital-gains-tax-implication-on-selling-art

I think the taxman would be interested in Dinahmo's £49,950 profit...