EBay - Stamp Collector - Sales of Stamps

Hi. I am a stamp collector who has been collecting for over 60 years and as I am now retired I have the time to sort out all that I have amassed over the years mainly by buying up small collections in local auctions. The stamps from these various collections are used to fill gaps in my collection and some are switched with my collection where I find a better example than the one I have. To help keep the clutter down I have taken to selling off the unwanted surplus on Ebay. The value of the stamps is low but the number of items is high so I could well exceed the 30 items which I read makes them reportable. The stamps were never bought with any intention of making any profit but merely to improve my collection. Quite a number were gifted to me when I was a child. I would find it impossible to quantify any gain or loss for a number of reasons :- 1) many were bought over 20 years ago, the price paid was for an album of stamps and I can see no way to attribute a value to a particular stamp of set of stamps which I now want to sell 2) I don't have details of the cost for the older items, some were gifts. 3) The lots I sell have are normally made up come from a number of sources. If I take the cost of items bought over the last few years for which I have records these will be many times more than any sales I manage to achieve. To further complicate matters I have also started to dispose of other items eg books, children's toys etc. in an effort to reduce the clutter before the inevitable downsizing of house as we grow older. Am I right in believing this would not be considered a trade as there was never any intention of making a profit or indeed any reasonable possibility of making any profit? Even if its not a trade would I have to complete tax returns if I sell more than 30 items or more than £1000? If I have to send in a tax return can I off set my buying costs at auction against my eBay sales to show a loss? Thanks - any guidance would be much appreciated as this all looks like a nightmare to sort out.

Hi,

The disposal of personal possessions, falls under the rules for Capital Gains Tax. In a tax year where the value of your disposals, minus acquisition and disposal costs, is greater than the annual exempt allowance of £6000 in the tax year 2023 to 2024, Capital Gains Tax is payable. You can see guidance regarding chattles and sets of assets here:

CG76631 - Chattels: sets of assets: special rules

Capital Gains Tax on personal possessions

The selling platform will be required to report the disposal to HMRC, when a certain number of disposal have occured.  

The rules for disposing of personal possessions, will remain unchanged and gains will be subject to Capital Gains Tax rules. Where you acquire assets to intentionally send on, then this is not personal possessions, but trading and should be declared as self employment/sole trader to HMRC.  

You can see more infoirmation about collections here: 

CG76870 - Chattels: particular assets which are chattels

Thank you.

Hi Thanks for the reply. I have read the links provided and still remain a little confused. My understanding is that :- 1) When I sell a single stamp, a part or the whole of my collection it would be subject to capital gains tax if the gain was more than the allowance for that year. My only problem is being able to identify a a value for the gain as some stamps were given to me, some were bought years ago and I don't now know how much I paid. 2)When I sell stamps which I have bought at an auction ( often years ago) with the intention of keeping some for my collection and selling the others to offset the cost these sales are not subject to tax as the sale probably result in an overall loss or break-even at best due to the value of the stamps retained in my collection. Its not the intention of making a gain when buying, the intention is to improve my collection and to offset some of the cost by selling the remainders, plus it helps keep the stamp mountain under some control The problem is that the number of sales will probably exceed the 30 which I understand is the point at which Ebay is required to notify HMRC. Will this require me to send in a tax return?

Hi,
The following links provide specific guidance on the potential Capital Gains tax implications of selling stamps:                            
CG76883                                                        
Capital Gains Tax on personal possessions                                                      
You have to submit a tax return if :
you  sold or disposed of chargeable assets which were worth more than £49,200:
your  chargeable  gains  before  taking off  any  losses    
were more than £12,300 (‘annual exempt amount’)
you  have  gains in  an earlier year taxable in this period
you  want to  claim  an  allowable capital loss or make a capital gains claim or election for the year:                                                
Capital Gains Tax summary notes
Thankyou.

Hi Thanks for the further comments and guidance in Capital Gains, this I understand and I doubt it will ever be a problem as I have no intention of selling my collection and if I did the gains would never exceed the allowances. My concern is whether my buying and selling of stamps ,as described above, to extend and improve my collection will be considered by HMRC as a trade given that the number of sales may well exceed 30 and the value ( but not gain ) may possibly exceed £1000. If it is considered as a trade then will I have to start sending in Tax Returns? It's really some guidance in this area that would be appreciated. Thanks

Hi,

You can see guidance here;

Selling online and paying taxes - information sheet

Thank you.

Hi Thanks for the link to the information sheet which I have read. The closest example to my situation is the model car collector but the notable difference is he makes a profit and does it for gain where as I don't do it for gain and always end any year having spent far more buying stamps than I manage to recover by selling off surplus stamps. Can you please confirm that I do not need to complete a tax return for this activity as described. A simple yes or no would be appreciated as no of the links given so far seem to match my activity. Thanks

Hi,

If you disposed of assets and made a gain of over £6000 in the current tax year, that ends on 5 April 2024, you would be required to declare the gain and pay the tax, using the real time capital gains service online by no later than 31 December 2024:

Report and pay your Capital Gains Tax

If you did not do this, then a tax return is required to declare the gain.  

If there are no gains or they are below the annual exempt allowance, then there is no requirement to declare the gain. To be sure that a tax return is not required for other reasons, you should check the self assessment criteria tool here:

Report and pay your Capital Gains Tax

Thank you.