Selling off watch collection - quick tax question?

[IsabellaL]

Hi! A few months back my grandfather passed away, and one of his possessions he left me was his watch collection. I've never been 'into' watches as such, and so didn't have a clue what to do with them, so far they've been in the box safe in my loft. I'm thinking about selling them to someone who will get better use and just in general be able to take better care of them. I've had someone value them and apparently all of it is worth £3,200 - way more than I would've expected (hence why it's away in the loft!) I was wondering if I sold these, would it count as taxable income as it's worth so much? Or something else, like capital gains? I don't have a clue how it works, having looked at sites like tax calculators but still can't figure it out, and as it's not an insignificant value I'd rather be sure about everything. Apologies for the long post, and hope to hear from someone soon!

[cop414]

No offense but shouldn’t you be speaking to a tax expert, not a group of watch nuts?

[MJ8]

Originally Posted by cop414

No offense but shouldn’t you be speaking to a tax expert, not a group of watch nuts?

Agreed, but This watch nut here is a tax adviser in his 9-5 monday to friday life lol

If you are in the UK, I assume IHT has already been paid on your grandfathers estate.

The watches you possess are " non wasting chattels" and selling these one off items would not constitute a "trade" therefore no Income Tax would be payable.

As the value of these watches is under £6,000 there is no capital gains compliance to worry about either.

[Busyboy]

Originally Posted by MJ8

Agreed, but This watch nut here is a tax adviser in his 9-5 monday to friday life lol

If you are in the UK, I assume IHT has already been paid on your grandfathers estate.

The watches you possess are " non wasting chattels" and selling these one off items would not constitute a "trade" therefore no Income Tax would be payable.

As the value of these watches is under £6,000 there is no capital gains compliance to worry about either.

Hi mate. Just curious. I thought capital gains kicked in at about £11k?

[MJ8]

Originally Posted by Busyboy

Hi mate. Just curious. I thought capital gains kicked in at about £11k?

Yes in the 2018/19 tax year year you have an annual allowance of £11,900 (For all of your gains combined). So even though the gain on the watches from probate value may be minimal, his other capital gains during the year may take him above the £11,900 annual allowance anyway.

The "£6,000 rule" relating to CGT is for non wasting chattels in their own right.

[peterpl]

How would the tax man find out even if you were liable? Its such a small amount of money.

We are not talking multi-million real estate here whereby government land titles offices and transfer of ownership is involved. Not a single person would know.

[dmash]

Originally Posted by peterpl

How would the tax man find out even if you were liable? Its such a small amount of money.

We are not talking multi-million real estate here whereby government land titles offices and transfer of ownership is involved. Not a single person would know.

+1, I thought serious ‘watch collection’ and OP was talking minimum $50k. $3k? Nobody from the government cares. That amount *is* an insignificant value to them.

[ag986]

Originally Posted by IsabellaL

Hi! A few months back my grandfather passed away, and one of his possessions he left me was his watch collection. I've never been 'into' watches as such, and so didn't have a clue what to do with them, so far they've been in the box safe in my loft. I'm thinking about selling them to someone who will get better use and just in general be able to take better care of them. I've had someone value them and apparently all of it is worth £3,200 - way more than I would've expected (hence why it's away in the loft!) I was wondering if I sold these, would it count as taxable income as it's worth so much? Or something else, like capital gains? I don't have a clue how it works, having looked at sites like tax calculators but still can't figure it out, and as it's not an insignificant value I'd rather be sure about everything. Apologies for the long post, and hope to hear from someone soon!

Post pictures of the collection and get a second opinion on the value. Good luck.

[Fleetlord]

Originally Posted by ag986

Post pictures of the collection and get a second opinion on the value. Good luck.

Totally..

Who appraised this value and what are the watches?

Since you came to Rolex forums are there Rolex in the mix?

This is how people get ripped off, so get other opinions for sure.

[77T]

Welcome to TRF!

Seems you got a good tax view in earlier reply so I’m making a suggestion in a different manner. Just In case you’re worried about gains.

Another option is to have the watches appraised. Then sell at market prices and the transaction(s) will be a net loss on paper. Even if audited your paperwork should be a good defense.


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[dmash]

Originally Posted by 77T

Welcome to TRF!

Seems you got a good tax view in earlier reply so I’m making a suggestion in a different manner. Just In case you’re worried about gains.

Another option is to have the watches appraised. Then sell at market prices and the transaction(s) will be a net loss on paper. Even if audited your paperwork should be a good defense.


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Just curious, does this always fly without issue? Would one need multiple appraisals to verify legitimacy?

[77T]

Originally Posted by dmash

Just curious, does this always fly without issue? Would one need multiple appraisals to verify legitimacy?

With a private person utilizing ordinary care, it is a step that would indicate no intent to evade any tax due. If it were a purely legal matter like a civil suit where damages were being assessed, then a single opinion would need corroboration.


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[dmash]

Originally Posted by 77T

With a private person utilizing ordinary care, it is a step that would indicate no intent to evade any tax due. If it were a purely legal matter like a civil suit where damages were being assessed, then a single opinion would need corroboration.


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Thank you

[Clasper]

As per MJ8s post. In addition the assets would have been valued at their probate value so it's unlikely that the values would have increased much between then and now anyway, again meaning very little chance of CGT.
If however you kept them a lot longer then sold and made a substantial profit, you may have a Capital Gains Tax liability.

[Ballzzz]

Post pictures of your grandfathers collection, you may be able to net more here depending on his watches. Good luck

[Gaijin]

Originally Posted by Ballzzz

Post pictures of your grandfathers collection, you may be able to net more here depending on his watches. Good luck

I think that is what he is trying to do..

[RazorD]

Tax advice aside, make sure you get a few opinions on what those watches are and what they are worth so you're not taken advantage of and receive a fair price for them.

[DonBateman]

Not sure in the UK but in the US the sale of the items would be categorized as a capital gain. What the capital gains rate is in the UK, I have no clue. Your basis would be the value of the watches on the date you inherited them (date of death of your Grandfather). That is where it gets tricky and you may have to consult a CPA.

[Fabrice M]

Originally Posted by DonBateman

Not sure in the UK but in the US the sale of the items would be categorized as a capital gain. What the capital gains rate is in the UK, I have no clue. Your basis would be the value of the watches on the date you inherited them (date of death of your Grandfather). That is where it gets tricky and you may have to consult a CPA.

My understanding in the US is that anything under $5mil. I think is tax free. So unless one of the watch is a Daytona owned by Paul Newman, no taxes would be due.

[ckaynyc]

In the US, you receive a "step up on basis" which is the value of the items you inherited.

[77T]

Originally Posted by ckaynyc

In the US, you receive a "step up on basis" which is the value of the items you inherited.

Originally Posted by DonBateman

Not sure in the UK but in the US the sale of the items would be categorized as a capital gain. What the capital gains rate is in the UK, I have no clue. Your basis would be the value of the watches on the date you inherited them (date of death of your Grandfather). That is where it gets tricky and you may have to consult a CPA.

I think it really depends on how these watches came into the OP’s possession.

People often casually say “I inherited” when in point of fact the item(s) were not mentioned in a Last Will & Testament. Inheritance is when one is a named party, and the property described. But everyone speaks differently versus the legal definition.

So if a grandmother or other relative gave it to the OP it might be a gift rather than an inheritance.


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[sco]

Looking forward to the pictures as well..

[function12]

I would keep them. You will regret selling them down the road.

[GB-man]

Would be hilarious if the OP posted the watches and they were vintage Daytona’s and Pateks lol

[RW16610]

OP, I hope you manage to get a fair price also. Do your due diligence and shop around so to speak. Since you seen to be in the clear of any UK tax based on a response above, this should now be your main concern. Post pictures when you can

Originally Posted by GB-man

Would be hilarious if the OP posted the watches and they were vintage Daytona’s and Pateks lol

Could you imagine?