Hypothetical tax question to really start 2026 with a bang 🤣

[HypotheticalTax]

I was making doom-laden prophecies as the fireworks came on and DH lightheartedly said 'this time next year, we could be millionaires!'.

I commented sarcastically that, unless one of my paintings (strictly a hobby for me) sold for £1 million I couldn't see it happening, since we don't do the lottery and none of our families are rich.

I then speculated that we'd be better off selling it as his painting since he is retired and has far more unused tax allowance than I do, as I work full-time.

This led to debating what would qualify it as 'his' painting for tax purposes, e.g. if he painted in a bit of sky, thought up a title, was the one to market it. How would HMRC prove who had actually done the painting?

All hypothetical as my paintings don't go beyond my own walls, except to the garage to gather dust, and frankly they're crap so no one would pay anything for them, but I'm interested to know the answer if anyone has any thoughts/experience.

Happy new year!

I'm ex HMRC & my view is that if you only sold a single painting it wouldn't qualify as a business, it would just be like selling one of your possessions. Only if you sell multiple paintings you have done to sell would you have to declare on your Self Assessment Return.

Presumably it would come down to who had the right to sell the painting, rather than who put brush to canvas etc. Or it could be deemed a partnership if you’ve both been involved.

But as PP said, a one-off sale is unlikely to meet the ‘badges of trade’ criteria, so not taxable.

And separately, have you used the Marriage Allowance to share DH’s tax-free allowance?

Possibly a more sensible answer than you were expecting to read on waking!

Happy New Year 🎉

It would be the value of the painting and who received the money that counts.

Is it above the £1000 trading allowance?

Whose account does the money go into?

Although if its a joint account one of you will need to declare it as yours or else you could declare half each.

It could get complicated if say you sold a painting for £1800, got the money paid into a joint account and decided it was a joint enterprise so under the £1000 trading allowance per individual. The chances of HMRC noticing is probably non existent but it would be an interesting conversation if they did.

If you have £1m income you wouldn’t have any tax allowance. But if it counted as DH’s he would be able to make more use of lower bands. Ignoring the fact that, as PPs have pointed out, it might not be taxable!

If you painted it for him or gave it to him, it would be his!

Thank you for your answers! It's an interesting question. I can't claim the married tax allowance @JeffTheSquirrel unfortunately because I just nudge into the 40% tax bracket and you can only claim it if all your income is taxed at the basic rate.

I suppose if I ever did sell anything at that value I could afford an accountant to help me manage the money in a tax efficient way!