Moneeza Siddiqui looks at the capital gains tax rules for chattels, including the partial exemption for non-wasting chattels.
There are specific tax rules for a category of assets termed as ‘chattels’.
Chattels are defined as ‘tangible, moveable property’. Examples include furniture, antiques, paintings, jewellery, motor cars, plant and machinery, etc., but motor cars are exempt.
The predictable useful life of chattels, estimated according to the type of asset and its intended use when acquired, determines the tax rules applicable.
Wasting assets exemption and exception
Chattels with a predictable useful life of 50 years or less are wasting assets and are exempt. Investing in such assets can be effective tax planning, but the drawback is that no