The Union flag is covered in holes from shot damage and still has a slight smell of gunpowder from the battle. It is known that the flag was flown from the Jackstaff of HMS Spartiate at the historic battle 204 years ago.
The flag was presented to Lieutenant James Clephan for his outstanding performance after defeating Napoleon's French army.
The 11ft by 7ft flag was handed down through the generations of the Clephan family and was kept in a darkened drawer to help preserve it.
After being given a pre-sale estimate of just £10,000 the hammer dropped on an enormous £384,000 to an anonymous bidder. This is thought to be the most expensive Union flag ever and one of the most expensive flags ever to be auctioned.
A quote from Charles Miller Auctions says "It is way above anyone's expectations but does reflect the historical importance of the flag and the battle it fluttered away in 204 years ago"
The flag is made up of 31 bunting panels by the crew of HMS Spartiate, which was the last ship in line behind Nelson's HMS Victory as they took on the French at Trafalgar.
The flag is one of the most important, historical items any collector could expect to handle. The damage is probably from bullet or splinter fragments, but despite all of this and being over 200 years old it is in amazing condition. You can even detect the smell of gunpowder in it.