Capital Gains = Unearned income? Help please.
Comments
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Thanks grey gym sock. The definition of unearned income seems to be the problem. I've just read in a Student Loans Company booklet an example which has you repaying based on your salary plus 9% of unearned income from stocks and shares. The term stocks and shares isn't too helpful as that could mean dividends (definate unearned income) or capital gains and dividends.
Still a little confused. I may ring them up, however, I reckon I'll just speak to people who don't have a clue what I'm on about! lolCurrent Savings - £4,537 / £10,000 - Dec '14 Target Savings :beer:
"Give me a one-handed economist! All my economists say, 'on the one hand on the other..'" Harry. S. Truman0 -
CGT is only payable when you sell and is the profit over £10k so split the sales over different tax years and you can avoid paying it at all.
Better still have the shares in an ISA to keep them tax freeRemember the saying: if it looks too good to be true it almost certainly is.0 -
Really sorry, guys, you lost me there. You are loaded, and you'd be able to gain a couple of pounds from not paying back a student loan a tad faster than you have to.
So why don't you just go ahead and make your couple of pounds?0 -
jimjames, thanks for the advice, but I already understand to CGT standard rules. I would do that, however, if I need a large chunk of money for a deposit then I can't do that. Also, if a takeover occurs I also won't be able to do that. I used last years CGT allowance to move gains in spread bets (safer then bed and breakfasting them as I'd be out the market for 30 days and they're tax free from now on). At the moment I'm just planning for future problems.Current Savings - £4,537 / £10,000 - Dec '14 Target Savings :beer:
"Give me a one-handed economist! All my economists say, 'on the one hand on the other..'" Harry. S. Truman0 -
innovate, I know it sounds fairly petty, but the way I have made the amount I have today is by capital reinvestment and not wasting money when I don't have too. For example, if I don't have to pay £4500 into my loan I could use that money again to invest further and perhaps turn it into £10,000. Thus losing a hypothetical £5500. It's called opportunity cost.
However, if the rules say I have to pay it, I will pay it and feel happy about having less debt. It's just a student loan is the cheapest form of debt you can possibly get because it's normally only linked to inflation (and currently below inflation as the interest rate can't be more then 1% above the BoE base rate, currently at 0.5%). Logic dictates that I'll try to pay this debt with the smallest amount I can legally get away with.Current Savings - £4,537 / £10,000 - Dec '14 Target Savings :beer:
"Give me a one-handed economist! All my economists say, 'on the one hand on the other..'" Harry. S. Truman0 -
Yeah, Young_Investor, I understand there is a lot of value in cheap money. If you are convinced you can make £5.5K in a year from the £4.5K student loan, you would of course be stupid to repay the £4.5K anytime soon.
Though this sort of gain is most likely accidental, rather than likely, to achieve.This is not to say that some lucky B8stard couldn't consistently outperform the market by a million miles............
Good luck to you, don't forget you appeared on MSE at some stage in your career.....0
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