As the Olympic Torch procession reaches London at the end of its epic round Britain tour Her Majesty's Customs and Revenue has issued a slightly less celebratory but nonetheless timely reminder clarifying the capital gains position on sale of assets, should any bearers be contemplating the destiny of their iconic flares
The bearers are gifted their torch, most likely intended as a keepsake. However there is clearly a market amongst enthusiastic collectors of these distinctive objects for the more entrepreneurially inclined flame carriers to contemplate, with reports of huge prices on sales, some in excess of £150,000, being achieved
Capital Gains Tax (CGT) is payable on the sale of any assets. In the absence of a base cost (purchase price) for a gifted torch, any sale proceeds over £6,000 will be liable to tax. Individuals are allowed an annual exemption of £10,600, and thereafter CGT is charged at a rate of 18% up to the basic rate limit and 28% beyond. That's a pretty fiery potential tax bill for some bearers who may not realise they have a liability at all
The Revenue have clarified the position further by stating that even if the sale proceeds are then gifted to a charity the torch bearer will still be liable to capital gains tax. However if the bearer were simply to donate their torch to a charity, for the charity to do with as they please, no tax would arise
The London 2012 Olympics are being described as the most commercial ever. But perhaps the HMRC's position should be viewed more in the pure spirit of the games: that it's not all about the winning - the reward for the galant torch bearers being just to have taken part?
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