Section A: Objective Test

Alistair sold an antique vase (a non-wasting chattel) for £7,200 in December 2023. He had purchased the vase at an auction in 2015 for £4,000.

What is the chargeable gain on the disposal of the vase before any annual exempt amount?

An antique vase is a non-wasting chattel. Because the cost (£4,000) is less than £6,000 but the proceeds (£7,200) are greater than £6,000, the marginal relief rule applies. Actual gain = £7,200 - £4,000 = £3,200. Restricted gain = 5/3 x (£7,200 - £6,000) = 5/3 x £1,200 = £2,000. The chargeable gain is the lower of the actual gain and the restricted gain, so it is £2,000.