Do I have to pay tax if I sell on my Christmas gifts? Consumer lawyer DEAN DUNHAM replies

Can I sell my Christmas gifts and other items I don’t want without paying tax?

R.R., Chislehurst, Kent.

Dean Dunham replies: It depends on what you are selling, why you are selling it and whether you make a profit from the sale.

If you’re simply selling personal belongings you no longer want and for less than they would cost to buy, then such a sale would not attract any tax liability if you do not make a profit.

However, if you are selling items you simply no longer want but for a profit — such as paintings, antiques, jewellery, vehicles and machinery — you may have to pay Capital Gains Tax (CGT).

Unwanted gifts: If you’re selling personal belongings you no longer want and for less than they would cost to buy, then such a sale would not attract any tax liability

Your private car and individual items each worth less than £6,000 (or £12,000 if you own them jointly with someone else, such as your husband or wife) are excluded, so will not attract a tax liability when sold.

‘Wasting assets’, or items that the tax man accepts have a lifespan of less than 50 years, are also excluded from tax liability, so you will not pay tax on the sale.

If you sell items you purchased specifically for re-sale and then make a profit, it will trigger a tax liability.

So, if you snap up clothing or household bargains online then sell them at car boot fairs or on sites such ebay and Gumtree, this will be deemed as a ‘trade’ — meaning you will need to register as being self-employed with HMRC and pay income tax on any profit you make.

Since April 6, 2017, you can boost your income by earning an extra £1,000 a year tax-free thanks to the trading allowance. 

It includes buying and selling online as well as money made from casual jobs such as dog-walking or babysitting.

You can earn £1,000 in each tax year this way. As a general rule, this means there is no need to tell HMRC or pay income tax on the money.

On top of the trading allowance, you also have your tax-free personal allowance. This is the amount you can earn before paying tax, which is currently £12,570.

Should I sign my car over to my son? 

My car insurance is too high and I don’t drive much so I want to sign my car over to my son. Are there any legal pitfalls?

K.S., Lingfield, Surrey.

Dean Dunham replies: What are your long-term intentions in relation to your vehicle? 

If you want to give it to your son as a ‘gift’, meaning he will legally own it and be free to do what he wants with it, including selling it, there are no legal pitfalls so long as you go through the correct process of transferring legal ownership with the DVLA.

However, if you simply want to allow your son to use the vehicle and therefore retain ownership yourself, the position is very different and could create legal pitfalls.

You could be held liable, for example, if your son gets a parking ticket, has a traffic accident or breaks any laws of the road. You will also retain responsibility for making sure the vehicle is insured, taxed, roadworthy and has an up-to-date MOT.

To limit these pitfalls you need to notify DVLA that your son is what is called the ‘registered keeper’ of the vehicle and ask it to update its records and then issue a new V5C document.

This is the vehicle logbook issued by the DVLA on registration of a vehicle in the UK. Its primary purpose is to serve as a vehicle registration certificate and provide the details of a vehicle’s registered keeper.

If you do this you will remain the legal ‘owner’ of the vehicle, effectively meaning the vehicle is still in your ownership and you will retain responsibility for making sure it is insured.

If your son is the registered keeper, that means he will be responsible to the DVLA and police in case of road traffic accidents, parking offences and speeding fines.

Finally, if you still have a loan on the vehicle, check that changing the registered keeper will not contravene your agreement.

• Write to Dean Dunham, Money Mail, Scottish Daily Mail, 20 Waterloo Street, Glasgow G2 6DB or email [email protected]. No legal responsibility can be accepted by the Daily Mail for answers given. 

This post first appeared on Dailymail.co.uk