By the time the Olympic flame reaches its final destination at the Olympic Park on the 27th July, it will have been carried by 8,000 torchbearers, travelled 8,000 miles and come within 10 miles of 95% of the country’s population.
If you were one of the chosen few to carry the Olympic torch you may now be thinking about what to do with what will, no doubt, become one of the most highly prized items of memorabilia from this summer’s games. One option you might wish to consider is the possibility of selling it. So, what’s the tax position if you decide to cash in?
HM Revenue and Customs (‘HMRC’) have confirmed that taxpayers who sell their Olympic torch may be subject to Capital Gains Tax (‘CGT’) if the proceeds of sale exceed £6,000. If the proceeds of sale exceed that amount then you will have a chargeable gain and you may have to pay CGT depending on what other gains you have made in the relevant tax year. If CGT is payable then the rate charged will be either 18% or 28% depending upon your total income for the relevant tax year.
If you regularly sell goods or services then the sale of your Olympic torch might be seen by HMRC as part of this trade and, in which case, any profit would be charged to Income Tax rather than CGT.
For the philanthropic torchbearers out there, you may wish to donate your Olympic torch to charity for them to sell and there would be no tax charge on the gift. Another possible option would be to sell it first and then give the sale proceeds to charity. Whilst there would be no exemption for CGT, even if you donate the money you receive on selling the torch, you would be able to make the cash donation under the Gift Aid Scheme. This would mean that for every £100 donated the charity could reclaim £25 from HMRC. However in order for the donation to be valid for Gift Aid you would need to pay enough Income Tax or CGT in the relevant tax year to cover the amount of tax the charity will reclaim on your gift.