Key facts
- A chattel sold for £6,000 or less is completely exempt from CGT, regardless of the gain.
- For chattels sold above £6,000, 5/3 marginal relief caps the gain at 5/3 of the excess over £6,000.
- Wasting assets (predicted useful life of 50 years or less) are exempt from CGT — this covers most machinery, vehicles, and livestock.
- Items forming a set (e.g., a pair of earrings sold separately) are treated as a single disposal if sold to the same person or connected persons.
- Cars are always exempt from CGT, including classic and vintage cars, because they are wasting assets.
How CGT Applies to Personal Possessions
For CGT purposes, a chattel is any item of tangible, moveable property. This covers a broad range of physical objects:[1]
- Jewellery — rings, necklaces, watches, bracelets
- Art and paintings
- Antiques and furniture
- Coins and stamps (non-legal-tender coins held as collectibles)
- Wine and spirits (fine wine held as an investment)
- Classic cars and motorcycles
- Musical instruments, books, and memorabilia
Land, buildings, and leases are not chattels (they are immoveable property). Shares, cryptocurrency, and other intangible assets are also excluded — they have their own CGT rules.
The £6,000 Exemption
If you sell a chattel for £6,000 or less, any gain is completely exempt from CGT. It does not matter how large the gain is — the exemption is based on the gross sale proceeds, not the profit.[1]
This means:
- A painting bought for £500 and sold for £5,900 = no CGT (proceeds £6,000 or less)
- A painting bought for £500 and sold for £6,100 = CGT applies (but marginal relief may reduce it)
Key point: If you sell a chattel at a loss and the sale proceeds are less than £6,000, the sale proceeds are treated as £6,000 for loss-calculation purposes. This restricts the allowable loss. For example, selling a £10,000 antique for £4,000 gives an allowable loss of £10,000 − £6,000 = £4,000 (not £6,000).[1]
The 5/3 Marginal Relief Formula
When a chattel sells for more than £6,000, a special marginal relief limits the chargeable gain. The maximum gain is capped at:[1]
5/3 × (Gross proceeds − £6,000)
You compare the actual gain with the marginal relief figure and pay CGT on whichever is lower.
Worked Example
You bought an antique vase for £2,000 and sold it for £7,500:
| Calculation | Amount |
|---|---|
| Actual gain: £7,500 − £2,000 | £5,500 |
| Marginal relief: 5/3 × (£7,500 − £6,000) | £2,500 |
| Taxable gain (lower figure) | £2,500 |
Without marginal relief, you would pay CGT on £5,500. With it, the gain is reduced to £2,500 — a significant saving.
Tip: Marginal relief only helps when the sale price is slightly above £6,000. As the sale price rises, the 5/3 figure eventually exceeds the actual gain, at which point marginal relief has no effect and you pay CGT on the full gain.
Wasting Assets: The 50-Year Rule
A wasting asset is a chattel with a predictable useful life of 50 years or less at the time of acquisition. Wasting chattels are exempt from CGT, regardless of their value or the size of the gain.[3]
Common wasting assets include:
- Motor vehicles (all cars, vans, and motorcycles are treated as wasting assets)
- Plant and machinery
- Boats (unless they are vintage vessels with an indefinite lifespan)
- Racehorses and livestock
- Clocks and watches (HMRC may argue some have a useful life exceeding 50 years, but most mechanical watches qualify)
This is why classic cars are CGT-exempt. Even a 1960s Ferrari worth millions is a wasting asset because HMRC classifies all motor vehicles as having a useful life under 50 years. This has made classic cars a popular alternative investment for those seeking tax-efficient growth.
Non-Wasting Chattels: What Is Taxable
Chattels with a useful life exceeding 50 years are non-wasting assets and are subject to CGT if sold for more than £6,000. These include:[2]
- Fine art and paintings
- Antique furniture (well-maintained pieces with indefinite useful life)
- Jewellery (gold, diamonds, and precious stones)
- Coins and medals (non-legal-tender collectible coins)
- Stamps (philatelic collections)
- Fine wine (vintage wine held for investment purposes)
Sets of Articles
HMRC has anti-avoidance rules for sets of articles. If items that form a set (such as a pair of earrings, a suite of furniture, or a collection of prints) are sold to the same buyer or to connected persons, they are treated as a single disposal.[1]
This prevents you from splitting a set worth £12,000 into two lots of £6,000 to claim two separate exemptions. The combined proceeds are used to test against the £6,000 threshold.
However, if items from a set are genuinely sold to different, unconnected buyers (for example, at separate auctions), each sale is treated independently and can qualify for the exemption on its own.
Summary: Common Collectibles
| Asset | Wasting? | CGT Position |
|---|---|---|
| Classic car | Yes | Exempt (always) |
| Racehorse | Yes | Exempt (always) |
| Jewellery | No | Exempt if sold for £6,000 or less; marginal relief above |
| Painting / fine art | No | Exempt if sold for £6,000 or less; marginal relief above |
| Antique furniture | No | Exempt if sold for £6,000 or less; marginal relief above |
| Fine wine | No | Exempt if sold for £6,000 or less; marginal relief above |
| Gold coins (bullion) | No | UK legal-tender coins (Sovereigns, Britannias) are always exempt; others follow chattel rules |
Key point: UK legal-tender gold coins (such as Gold Sovereigns and Britannia coins) are exempt from CGT regardless of value because they are sterling currency. Non-legal-tender coins (Krugerrands, foreign coins) follow the normal chattel rules.[2]
Frequently Asked Questions
What counts as a chattel for CGT purposes?
A chattel is any tangible, moveable property. This includes jewellery, art, antiques, coins, furniture, wine, classic cars, and other collectibles. Land and buildings are not chattels (they are immoveable). Intangible assets like shares and crypto are not chattels either.
How does the £6,000 chattels exemption work?
If you sell a chattel for £6,000 or less, any gain is completely exempt from CGT. If you sell for more than £6,000, CGT applies but the gain may be reduced by marginal relief. The £6,000 threshold is based on the gross sale proceeds, not the gain.
Are classic cars subject to CGT?
No. All cars, including classic, vintage, and high-value collector cars, are exempt from CGT. HMRC classifies all motor vehicles as wasting assets (predicted useful life of 50 years or less), and wasting chattels are exempt regardless of value.
What is the 5/3 marginal relief rule for chattels?
When a chattel sells for more than £6,000, marginal relief limits the taxable gain to 5/3 of the amount by which the sale proceeds exceed £6,000. For example, if you sell a painting for £7,200, the maximum gain is 5/3 × £1,200 = £2,000, even if the actual gain is higher.
Further Reading
- What Counts as a Disposal — when selling, gifting, or losing an asset triggers CGT
- How to Calculate a Capital Gain — the full computation including allowable costs
- Annual Exempt Amount — the £3,000 tax-free threshold for 2025/26
- Capital Losses — how restricted chattel losses work alongside other losses
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