How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Tony Tax Your Own Question

Tony Tax
Tony Tax, Tax Consultant
Category: UK Tax
Satisfied Customers: 14051
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
Type Your UK Tax Question Here...
Tony Tax is online now
A new question is answered every 9 seconds

I purchased a small L S Lowry painting in 2000 for £33,000.00.

Customer Question

I purchased a small L S Lowry painting in 2000 for £33,000.00. I have all necessary receipts. Upon trying to sell the painting rexcently through a London Auction they tell me the painting may not be authentic and would not sell it. The value has now dropped to a small amount for an L S Lowry 'lookalike' or I may preferably want to have it destroyed by the auction house so it does not find it's way onto another unsuspecting buyer in the future.
With all necessary back up paperwork form the auction house will I be able to claim a capital loss on this transaction of the difference between what I paid and what I sell it for now ? Thank you.
Submitted: 1 year ago.
Category: UK Tax
Expert:  Tony Tax replied 1 year ago.
Hi.

Can you tell me how much the fake Lowry is worth now please.
Customer: replied 1 year ago.
Probably a £150 or so as nice small lookalike oil painting in a nice frame but I would not be keen to sell it back onto the market in case someone in the future tries to pass it off as a real Lowry. I may be able to get the auction house to pay a nominal sum and then destroy it.
Expert:  Tony Tax replied 1 year ago.
Thanks.

The painting is treated as a chattel for Capital Gains Tax purposes. So, if you sell it for less than £6,000 (say £150), you will be treated as having received £6,000 for it in which case your allowable capital loss will be £27,000. If you sell it for £8,000, your allowable capital loss will be £25,000. Take a look here for more information on chattels and CGT.

Let me know if you have any further queries.
Tony Tax, Tax Consultant
Category: UK Tax
Satisfied Customers: 14051
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
Tony Tax and other UK Tax Specialists are ready to help you
Customer: replied 1 year ago.


I would like your advice as to how I prove the capital loss to HM Revenue and Customs. I have original purchase receipts and can obtain letter from London's Bonhams auction house confirming the small oil is a fake and giving present value , estimated by Bonhams, well below the £6000 limit. Would this surfice?


I am thinking of asking Bonhams to arrange to have the small oil destroyed and send to me a letter confirming this has been done as I do not want it to get onto the market at some future time and perhaps be bougth by another unsuspecting collector, will this surfice HM Revenue to allow my capital loss?

Expert:  Tony Tax replied 1 year ago.
That would do. If you don't already complete annual tax returns a letter to the tax office setting out the facts and figures will suffice. Don't send any receipts unless you are asked to. You don't need to do that until after the end of the tax year in which you sell the painting.

Strictly, the loss won't be an actual loss until you have sold the piece. Whether the Revenue will allow the loss on the basis of destroying it I will have to look into. Leave it with me and I will get back to you.
Customer: replied 1 year ago.


Thank you. Look forward to hearing from you.

Expert:  Tony Tax replied 1 year ago.
Thanks.
Expert:  Tony Tax replied 1 year ago.

Hi again.

I'm afraid I've been unable to find anything that would suggest that you can claim a capital loss by having a fake work of art destroyed. You would need to sell it in order to claim the loss.

 

I will keep on looking for any piece of information which may help.

Customer: replied 1 year ago.
,Thank you very much. I feel very uncomfotable selling this fake Lowry in case someone in the future tries to pass it off again a Genunine Lowry but if I must sell it for a small ammount and get a receipt then that is what i must do to create the capital loss.If you can advise any other 'good citizen' route please do come back to me.Very, very many thnaks.
Expert:  Tony Tax replied 1 year ago.
Thanks and good luck.

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Andrew Baker(baktax)

    Personal Tax Adviser

    Satisfied Customers:

    756
    35+ years experience in income tax, CGT, non-residence
< Last | Next >
  • http://ww2.justanswer.com/uploads/baktax/2009-7-15_202414_Frame.jpg Andrew Baker(baktax)'s Avatar

    Andrew Baker(baktax)

    Personal Tax Adviser

    Satisfied Customers:

    756
    35+ years experience in income tax, CGT, non-residence
  • http://ww2.justanswer.com/uploads/teap007/2009-01-10_145815_bill_justanswer_for_profile.jpg TEAP007's Avatar

    TEAP007

    Tax Preparer

    Satisfied Customers:

    754
    Fully Trained Inspector of Taxes / District Inspector/ Team Leader/ Offshore Consultant/ 41 years
  • http://ww2.justanswer.com/uploads/BE/berduchwal/2011-6-7_84817_pict0854.64x64.jpg berduchwal's Avatar

    berduchwal

    Accountant

    Satisfied Customers:

    669
    Qualified accountant and bookkeeper running my own practice since 2008.
  • http://ww2.justanswer.com/uploads/JO/Josh2010/2012-4-29_19490_GettyImages80121770B.64x64.jpg Joshua's Avatar

    Joshua

    Lawyer

    Satisfied Customers:

    61
    LL.B (Hons), Higher Prof. Dip. Law & Practice
  • http://ww2.justanswer.com/uploads/RO/Ronaann/2012-3-19_23343_SSL22629.64x64.JPG Mrs-Tax's Avatar

    Mrs-Tax

    Tax Adviser

    Satisfied Customers:

    59
    Law Degree, 19 years in UK Tax.
  • http://ww2.justanswer.com/uploads/TG/TGraham12/2012-7-17_81212_bigstockBusinessHandshake508163.64x64.jpg Thomas's Avatar

    Thomas

    Solicitor

    Satisfied Customers:

    48
    Exposure to general tax issues
  • http://ww2.justanswer.com/uploads/struppiaml/2009-10-9_95150_anthony_business_002.jpg AnthonyL's Avatar

    AnthonyL

    Tax Adviser

    Satisfied Customers:

    19
    ATT, ATII, 12 years tax experience