Questions of cash: If I sell off my wine, will I be taxed?

Q. Since 1985, I have accumulated a collection of fine wine, which is worth about £100,000. I am considering selling two-thirds and keeping the rest for personal consumption.

I have received conflicting advice regarding capital gains tax. I am a professional trader and higher-rate taxpayer. If I dispose of £70,000-worth of wine in one transaction, incurring a substantial gain, will I be liable to CGT or am I exempt under the "moveable assets" exemption? Would this change if I sell the wine piecemeal?
JR, Twickenham.

A. "The tax treatment of the part-disposal of your wine collection is likely to fall within the disposal-of-chattels regime, falling into the CGT rules," says Glenn Martin, senior tax manager at accountants Moore Stephens.

"But gains on the sale of chattels that are wasting assets - a predictable life of 50 years or less - are exempt from CGT.

Fine wines may be treated as not being wasting assets if it is not unusual to keep all, or samples of, the wine for a substantial time, sometimes over 50 years.

You must obtain advice from a wine expert to decide if your wines can be treated as wasting assets. If your wines are not wasting assets, any profit may be exempt if the proceeds for a single bottle are £6,000 or less, provided it is not part of a "set".

If a bottle is part of a set, the £6,000 exemption applies to the total proceeds for the set. Wine will be deemed to be a set if it was produced from the same vineyard, in the same vintage year, and the bottles are worth more when sold collectively.

"There is a special rule for calculating CGT on the sale of chattels. This restricts the gain to five-thirds of the excess proceeds over £6,000. The tax position would be different if the Revenue could argue you were trading in wine. Any profit would then be taxed as income, not as a capital gain."

Q. My husband and I have for 18 months pursued a claim against Lloyds TSB for the mis-selling of an endowment mortgage in 1988 for our house in Guernsey.

Scottish Widows says we are likely to be £22,200 short on maturity in 2013. Lloyds TSB says the policy was sold by an insurance agency, not by the bank, even though we only met bank representatives. We cannot refer the case to the Financial Ombudsman Service, as it does not cover Guernsey. The Guernsey Financial Services Commission reviewed our documents to see if our complaint involved "any matters of regulatory concern", but it does not have a complaints service similar to FOS.
JD, Guernsey.

A. Peter Neville, the director general of the Guernsey Financial Services Commission, says: "A complainant's recourse is initially directly to the financial services business that sold the product and then, if necessary, to the court."

While the Guernsey administration is discussing setting up an ombudsman scheme, this may be of no help to you, as it is unlikely to be retrospective. But Lloyds TSB has agreed to reopen your case and conduct a full review. It will adopt the same procedure as if the sale fell within UK jurisdiction, though if it does not find in your favour, you will not have recourse to the ombudsman.

* If you have any queries, write to: Questions of Cash, The Independent, 191 Marsh Wall, London E14 9RS, or e-mail: cash@independent.co.uk. Please send copies, not originals.

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Have you tried new the Independent Digital Edition apps?
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Mortgage Advisor - OTE £95,000

    £40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...

    SThree: Trainee Recruitment Consultant

    competitive: SThree: Are you passionate about sales?Do you have a keen interes...

    Recruitment Genius: Loan Adviser - OTE £30,000

    £17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

    Recruitment Genius: Sales Assistant / Buyer

    £15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

    Day In a Page

    Isis in Syria: Influential tribal leaders hold secret talks with Western powers and Gulf states over possibility of mobilising against militants

    Tribal gathering

    Influential clans in Syria have held secret talks with Western powers and Gulf states over the possibility of mobilising against Isis. But they are determined not to be pitted against each other
    Gaza, a year on from Operation Protective Edge: A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians

    Gaza, a year on from Operation Protective Edge

    A growing population and a compromised and depleted aquifer leaves water in scarce supply for Palestinians
    Dozens of politicians, bureaucrats and businessmen linked to Indian bribery scandal die mysteriously

    Illnesses, car crashes and suicides

    Dozens of politicians, bureaucrats and businessmen linked to Indian bribery scandal die mysteriously
    Srebrenica 20 years after the genocide: Why the survivors need closure

    Bosnia's genocide, 20 years on

    No-one is admitting where the bodies are buried - literally and metaphorically
    How Comic-Con can make or break a movie: From Batman vs Superman to Star Wars: Episode VII

    Power of the geek Gods

    Each year at Comic-Con in San Diego, Hollywood bosses nervously present blockbusters to the hallowed crowd. It can make or break a movie
    What do strawberries and cream have to do with tennis?

    Perfect match

    What do strawberries and cream have to do with tennis?
    10 best trays

    Get carried away with 10 best trays

    Serve with ceremony on a tray chic carrier
    Wimbledon 2015: Team Murray firing on all cylinders for SW19 title assault

    Team Murray firing on all cylinders for title assault

    Coaches Amélie Mauresmo and Jonas Bjorkman aiming to make Scot Wimbledon champion again
    Wimbledon 2015: Nick Bollettieri - Vasek Pospisil must ignore tiredness and tell himself: I'm in the quarter-final, baby!

    Nick Bollettieri's Wimbledon Files

    Vasek Pospisil must ignore tiredness and tell himself: I'm in the quarter-final, baby!
    Ashes 2015: Angus Fraser's top 10 moments from previous series'

    Angus Fraser's top 10 Ashes moments

    He played in five series against Australia and covered more as a newspaper correspondent. From Waugh to Warne and Hick to Headley, here are his highlights
    Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

    EU 'family' needs to forgive rather than punish an impoverished state

    An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
    Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

    Gaza, a year on from Operation Protective Edge

    The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
    How to survive electrical storms: What are the chances of being hit by lightning?

    Heavy weather

    What are the chances of being hit by lightning?
    World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

    World Bodypainting Festival 2015

    Bizarre and brilliant photos celebrate 'the body as art'
    alt-j: A private jet, a Mercury Prize and Latitude headliners

    Don't call us nerds

    Craig Mclean meets alt-j - the math-folk act who are flying high