Written by Hugo Sanson - Friday, March 5, 2021
As you rummage through your jewelry box for a nice pair of earrings to match your OOTD, you catch a glimpse of an old gold garnet necklace you inherited from your grandmother and realize you haven’t worn it in years… Instead of abandoning it, you decide it’s time to part with it by putting it up for sale.
And you’re absolutely right! You can surely sell this necklace for a good price. However, you need to know that the sale of precious objects, whether that is jewelry, precious metals or art, may be subject to tax. If this all seems a bit fuzzy to you, don’t panic, LIKE A B. is here to help you! Let’s take a look at the French tax system and its specific features regarding capital gains on the sale of precious objects.
First of all, you need to know that achieving capital gain on the sale of an artwork or a piece of jewelry (whether or not it is made of precious metal) does not necessarily entail tax! In fact, you will be exempted from taxes if the selling price is under €5,000. For instance, if you’re selling a Cartier Trinity ring for €1,300, there is good news: you won’t need to pay tax!
If you’re selling your piece of jewelry or artwork for more than €5,000, things get a little tricky, but don’t worry, we’ll explain everything. There are two possible cases.
1) I don’t have acquisition records
If you are unable to prove the origin of your lovely gold gemstone necklace, the “taxe forfaitaire” (flat-rate tax) will apply. This represents 6.5% of the selling price. You must pay this tax within one month after the transfer using
If you’re selling your vintage necklace for €15,000 the flat tax will amount to 15,000 * 6.5% = €975. Don’t be too sad, you’ll still have a good amount of money left…
2) I have acquisition records
If you’ve kept your receipts (e.g., receipts, invoices, safe deposit box inventory), well done! You can apply the “régime de droit commun” (common law system). This means you can either get tax allowances, or even better, be exempted from taxes. Sounds tempting, right?
In terms of paperwork (this time you can’t avoid it, but it’s worth it), you will need to fill out
So how do you determine which case applies to you? It all depends on the holding period. If you’ve held your necklace for more than 22 years, you are entitled to total tax exemption. Otherwise, an allowance of 5% per year of ownership starting from the second full year is applicable. The capital gain is then taxed at the rate of 36.2%. So if your necklace isn’t that old, you will need to do a little math… get your calculators out!
Reminder:
Net capital gain = (selling price – maintenance costs and intermediary fees) – purchase price
You can of course decrease the selling price and increase the purchase price upon presentation of valid supporting documents.
Suppose your rose gold and diamond Chaumet bracelet was sold at €15,000. You bought it for €12,000 in January 2006 and decide to sell it today in March 2021 for €15,000, including €900 of expenses upon presentation of supporting documents.
Net capital gain = (15,000 – 900) – 12,000 = €2,100
Now, we need to determine the taxable capital gain. Let’s assess the allowance of 5% per year of ownership after the second year, i.e., 2008 until 2020 inclusive (because the transfer takes place in early 2021 but only full years are taken into account).
Allowance rate = 5% * 13 years = 65%
Taxable capital gain = 2,100 * (1-0.65) = €735
Capital gain tax = 735 * 36.2% = €266.07
When comparing this result with that obtained with the flat tax, it appears that the common law system is fiscally more advantageous (€266.07 vs 975€)… I bet you will carefully preserve all of your receipts from now on!
All those broken gold chain bracelets are cluttering up your apartment and you don’t know what to do with them… what a pain! Seriously, beware when selling precious metals such as gold, platinum or silver that are raw or mostly unprocessed because they are subject to taxation starting at one euro. Again, it all depends on whether or not you’ve kept your receipts.
1) I don’t have acquisition records
In that case, you will be subject to the flat tax, which represents 11% of the price plus 0.5% for the “CRDS” (the social debt repayment contribution), i.e., 11.5% of the price.
2) I have acquisition records
As with jewelry and artworks over €5,000, you can use the common law system if you are able to justify the acquisition of your precious metals.
Now that you know the basics of taxes on jewelry, precious metals and artworks in France – and you’re no longer going to leave your receipts lying around everywhere), you’re ready to sell the old jewelry you haven’t worn in ages…
But because we like to think ahead, we have also prepared a
Article written in collaboration with Isis Eutrope