Assuming that you are not trading in pictures then the only tax you may be liable to pay is capital gains tax. For items that are classed as non-wasting chattels such as jewellery, paintings and furniture, if the sale price is less than £6,000 then the gain is exempt.
If the sale price is more than £6,000 then the gain is restricted to the sale price less £6,000, multiplied by five over three. Based on your figures there would be no liability to capital gains tax on the first picture as the sale proceeds are less than £6,000. On the second painting the gain will be restricted to £1,666 (£7,000 less £6,000 times five over three) not £6,700 (£7,000 less £300).
However you have an annual capital gains tax exemption, currently £10,100. Therefore unless you have other capital gains in this tax year or the gains are more than £8,434 you will not be liable to any tax.
By Jo Nockels
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