With the Olymipc Torch Relay due to pass through Oxfordshire on the 9th and 10th of July, local accountancy firm Whitley Stimpson issues a tax warning to torchbearers who are thinking of capitalising from their experience.
This follows reports of gold torches purchased by torchbearers as a souvenir to celebrate the occasion being auctioned online for thousands of pounds with some bids reaching in excess of £5,000.
Although some people are genuinely keen to use the memorabilia as a way to fundraise for charity, this does not make them exempt from capital gains tax. If the torch is worth more than £6000 when sold, torchbearers should typically expect to pay tax, dependant on other gains in the tax year.
Owen Kyffin, Tax Partner, Whitley Stimpson explains: “Normally a gain of up to £6,000 made on selling a ‘chattel’ is exempted from capital gains tax. A ‘chattel’ is a legal term meaning an item of tangible, moveable property – something you can both touch and move, so for example personal possessions including household furniture, paintings, antiques, items of crockery and china, plate and silverware, loose items of plant and machinery not permanently fixed to a building.
“However, care has to be taken when a chattel forms part of a set. This is the case where assets are similar and complementary to each other, and as a consequence are worth more together than separately. So for example six matching antique dining chairs worth more as a set would have to be considered together when looking at the £6,000 limit, rather than as individual assets. The same will apply for an Olympic torch and runner’s suit.”
The torches cost £495 but can be bought by bearers for a discounted £215 intended as a nostalgic keepsake. HMRC has issued guidance to London 2012 Olympic torchbearers, many of whom have not even completed their leg of the relay yet but appear keen to benefit from their role.