Olympic torch eBay tax warning
Filed under: Tax
Now the taxman has chimed in, with a message that may just tip the balance.
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Tax stingNormally those who sell the odd personal possession on eBay don't attract the attention of HMRC, because it's the traders and those running a business they are interested in. However, the sheer level of profit people could stand to make that has got the taxman interested.
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The Olympic torches were sold to bearers for £215 - and some were given free of charge by the sponsors of the relay. Many have then shown up online for sale for many times this value.
HMRC has issued a warning to anyone considering selling. The tipping point is if the torch fetches more than £6,000. The taxman said in a statement: "If the torch is worth less than £6,000 when you sell it then you will not have to pay Capital Gains Tax on your proceeds. If it is worth more than £6,000 then you will have a chargeable gain."
How much tax?The level of tax payable on this gain will depend on the other gains you make from things like selling shares or a second home this year - but you will be taxed at least 18% and possibly up to 28% on all the profit you make.
If the seller is a regular trader there is more tax to pay, HMRC adds: "If someone regularly sells goods or services, they are likely to be trading and will be liable to income tax on their trading profits."
It also warned that it doesn't make any difference whether the torch is being sold for charity or for personal gain - the same rules apply - although you will be able to donate the proceeds using gift aid.
However, it pointed out that if you choose to give the torch to charity for them to decide what to do with it, you won't have to pay any tax on your donation.
For saleAt the moment there are a number of torches for sale. One, from a runner in Maidstone, is offered with the stand and uniform and at the time of writing had received bids of £6,300 from 34 bidders.
Another, from a runner in Fareham, is being sold with the stand and uniform, with a promise that 10% will be donated to charity and the remainder will ensure the seller can continue his charitable work. So far 39 bidders have pushed the price to £4,188.88.
And a third in Suffolk is selling for £2,900 with a promise that 25% of the proceeds will go to charity.
Odd torch memorabiliaThere are also a number of more unusual Olympic torch auctions around. These include a 'handmade Olympic Torch' which includes the caveat: "Please note, you are bidding on a piece of paper lovingly decorated to look like the Olympic Torch by me and my 10 year old son. The money from the sale of this will go towards paying for my son's school meals.... I will also donate 15% to Cat Action Trust in Pembrokeshire, as the lady there does a fantastic job." At the time of writing there were no bids.
There is also a listing for a "Patch Of Grass Run On By The Olympic Torch Runner". The note explains: "Hello and welcome to a patch of grass stood on (probably) by a Olympic torch runner in Hanley Forest Park, Stoke on Trent." It goes on to explain: "No money will be given to charity, all the proceeds will go into my wallet which will help me take my girlfriend out to a nice posh restaurant... This meal will guarantee that my girlfriend doesn't leave me for the actual torch bearer who did run into Hanley Forest Park. Not only does he have the torch but my girlfriend said she wouldn't mind him running down past our house in them shorts."
There are a number of people selling the limited edition Coke bottles handed out for free by sponsors at the relay, a few of which are fetching up to £5 each. One individual is selling a couple of Coke bottles and a commemorative drum also handed out for free with a reserve of £45.
So what do you think, is this just the free market ensuring those who most want the torches will get them, and those who most need the cash will get it too? Or is this a despicable approach to something which was meant to be an honour that money couldn't buy? Let us know in the comments.
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