Few of us will ever manage to sell a thirty-year-old shirt for £25,000 (note to self: check bottom of wardrobe). But that was the price fetched at auction in March for the chemise that famously rendered a young Colin Firth a sex symbol in the BBC’s 1995 adaptation of Pride and Prejudice.
In tax terms the shirt was nothing more or less than a chattel (‘tangible moveable property’). A capital gain on the disposal of a chattel is normally free of tax if the chattel is a ‘wasting asset’ (meaning that its predictable life at the time it was acquired by the person making the disposal in question was no more than 50 years).
Any item of machinery is deemed for this purpose to be a wasting asset, regardless of its age or predictable life. That is why gains on a whole range of mechanical items from antique clocks to racing cars are normally free of Capital Gains Tax (‘CGT’).
For other assets, the predictable life is a question of fact. It’s quite possible that an item that would ordinarily be regarded as of transitory existence might, because of its historical significance or celebrity status, have a much longer predictable life. Football shirts don’t usually last 50 years: but it would be difficult to argue that those of England’s 1966 World Cup winners (one of which reportedly changed hands for £130,000 in 2022) will not still be around in 2074.
Whether such longevity may be predicted for Mr Darcy’s shirt is an interesting question and one on which much may hang.
We should add two caveats for completeness.
The first is that we are assuming that the present vendor didn’t own the shirt at the time when the production was filmed. If that assumption is wrong and the shirt has been languishing in the stores of the TV or properties company since 1995, the position gets even more complicated.
The second is that we are assuming that the present vendor did not buy the shirt with the intention of realising a short-term profit on its resale. If that assumption is wrong, the profit is likely to be assessable as trading income.
For more information on the CGT implications of chattels, and on the broader tax implications of inheritance and estate planning, please get in touch with your usual BKL contact or use our enquiry form.
[Image credit: Craiyon]