Do you pay Capital Gains Tax on Rolex sales in the UK?
Luxury watches like Rolex aren’t just timepieces, they’re investments.
In fact, the pre-owned watch market in the UK has been booming, with many people selling or trading watches for a profit. But here’s the big question: do you have to pay Capital Gains Tax (CGT) when you sell a Rolex in the UK?
The short answer is: it depends. If your Rolex sells for more than a certain amount and you’ve made a gain, HMRC may expect you to pay tax.
Let’s break it down so you know exactly where you stand before you part ways with your Submariner or Daytona.
Do you pay Capital Gains Tax on Rolex sales
What is Capital Gains Tax on Personal Possessions in the UK?
Capital Gains Tax is a tax you pay on the profit (gain) when you sell something for more than you bought it for. Rolex watches fall under HMRC’s category of “chattels”—tangible, movable personal possessions.
Here’s the key rule:
If you sell a personal item (like a Rolex) for £6,000 or less, you don’t usually pay CGT.
If you sell for more than £6,000, CGT may apply, but only on the gain, not the full sale price.
Example:
You bought a Rolex GMT-Master for £5,000 in 2018.
You sold it in 2025 for £10,000.
Your gain = £5,000 (selling price minus buying price).
You won’t pay tax on the full £10,000, only on the gain above the annual tax-free CGT allowance.
When Does Capital Gains Tax Apply to Rolex Sales in the UK?
HMRC does have rules about when and how CGT applies to high-value watch sales, and it’s not always as straightforward as people think. Without understanding those rules, you could underpay, overpay, or miss out on legitimate tax reliefs.
If you sell a Rolex for more than you bought it, you might need to pay Capital Gains Tax (CGT) on the profit.
In the UK, CGT applies when the gain exceeds your annual tax-free allowance (known as the Annual Exempt Amount). For the 2024/25 tax year, that allowance is £3,000.
This means if your profit from selling a Rolex is less than £3,000 in total for the year (combined with any other taxable gains), you won’t owe CGT. But if your gain pushes you over that threshold, you’ll need to declare it and pay tax.
It doesn’t matter whether you bought the watch new or second-hand, what actually matters is the price you paid, the price you sold it for, and any selling costs you can deduct.
HMRC treats high-value watches like other personal possessions worth more than £6,000, so they’re not automatically exempt.
How to Calculate CGT on Rolex Profits
Working out CGT on a Rolex sale is basically about finding your profit, which is the difference between what you paid and what you sold it for, minus any allowable costs.
For example, say you bought a Rolex for £12,000 and later sold it for £18,000. You can deduct things like auction fees, valuation costs, or repairs done purely to keep the watch in good condition. If those costs total £500, your taxable gain would be:
£18,000 (sale price) – £12,000 (purchase price) – £500 (costs) = £5,500 gain.
If your total gains for the year (including this sale) are over the £3,000 tax-free allowance, you’ll pay CGT on the amount above that.
The tax rate depends on your income. 10% if you’re a basic rate taxpayer, or 20% if you’re a higher or additional rate.
Exemptions and Allowances You Should Know About
Not every Rolex sale ends with a CGT bill. The UK gives you an annual tax-free allowance, currently £3,000 for the 2024/25 tax year, so if your total gains from selling all assets in a year stay under this limit, you won’t owe any CGT.
There’s also something called the chattel exemption. This applies to personal possessions (like watches) sold for £6,000 or less. If your Rolex sells within that limit, you won’t have to pay CGT on it at all.
It’s worth noting that these rules apply to personal sales. If you’re in the business of buying and selling watches, HMRC might treat your profits as trading income instead, which means different tax rules apply.
Tips to Reduce Your Capital Gains Tax Liability on Rolex Sales
When you’re selling a Rolex that’s likely to trigger Capital Gains Tax, there are a few smart ways to keep your bill as low as possible - legally, of course.
First, make the most of your annual Capital Gains Tax allowance. Every individual gets a tax-free allowance each tax year, so if your gains fall within it, you won’t pay CGT at all. If your profits are higher, you might want to time your sales so that you spread them across two different tax years to maximise the allowance twice.
Second, keep thorough records. This means noting down the purchase price, any costs linked to restoring or valuing the watch, and selling expenses like auction fees. These can be deducted from your gain, reducing the taxable amount.
Third, if you own the watch jointly with a spouse or civil partner, consider transferring ownership before selling. This way, you can use both of your CGT allowances and potentially pay less tax overall.
And finally, if you’re not sure about the best approach, get advice from an accountant who understands luxury watch sales and tax rules. Sometimes, a small bit of planning can save you a big chunk of your profit.
Conclusion
Selling a Rolex can be a profitable move, but without the right tax planning, a large part of your gain could end up with HMRC instead of in your pocket.
By making smart use of allowances, keeping accurate records, and seeking expert advice, you can reduce your Capital Gains Tax liability and keep more of your hard-earned profit.
At Rhombus Accounting, we help watch dealers, collectors, and resale businesses keep more of their profits while staying fully compliant with HMRC rules. Selling a Rolex doesn’t have to mean losing a big part to Capital Gains Tax.
With the right planning, smart use of allowances, and professional guidance, you can reduce your tax liability and make the most of every sale.
Thanks for reading!
Meet Lewis
Lewis is a professional accountant and the founder of Rhombus Accounting. He regularly shares his knowledge and best advice here on his blog and on other channels such as LinkedIn.
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