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14 April 2015
Calculating tax on the sale of gemstones within the EU
My client trades as a high-class jewellery business in London. She has just agreed the sale of a very expensive diamond to a German-based customer (a private individual) for £5m. This is the first sale she has made to any customer who lives outside the UK. My query relates to the following VAT aspects.
- Can the client treat the transaction as a sale under the second-hand margin scheme? She bought the diamond for £3m from the estate of a private individual two years ago.
- If the “margin sale” option is not allowed does that mean the £5m sale must be inclusive of 20% VAT? Does it make any difference that the German customer is purchasing the diamond as an “investment” with a view to selling it at a profit in five years? I think I have read somewhere that investment stones...
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