Is CGT applicable for unemployed?

dc.pecheur

Thank you all for your valuable time spend on this query.

Scenario: My wife is a housewife, so basically no income. As she is unemployed she will be allowed certain income tax free. I could see income until 10K is tax free. 1) Does she qualify for Capital Gain Tax of 10,900 allowance as well even when she is unemployed or earning below 10K?

For example she will be investing in stocks. If she gets a 30,000£ profit in 2014, could you say me how much does she will be end up paying for tax?

My calculation says, she is still on a 20% tax bracket as she is within 32K. So while I subtract CGT of 10,900£ from 30K profit, roughly tax declaration must be for the amount 19K and I will be end up paying 20% on 19K. Am I right?

please could you clarify the above questions. Thank you all

gadgetmind

You only realise a capital gain when you actually sell the shares but you may also need to consider ongoing dividends.

Dividends are income and tax of 10% is due, but this is taken off before you get them (with no means to reclaim) so there is no more tax for a basic rate tax payer.

With capital gains, you first deduct the annual allowance as everyone gets this allowance and there is 0% tax if your gains are below this. You then "stack" any remaining gains on top of income and dividends (in that order) and you will pay 18% on anything below the HR tax threshold and 28% on anything above.

dc.pecheur

Thank you gadget mind

colalba

I am not clear if you have £30k gain to take now or whether you are just checking out things for the future.


If it is the latter then your wife can put the investments into a stocks and shares ISA. Once it is in this tax wrapper it will no longer be subject to CGT however much gain it makes. For 13/14 she can put in £11520 and a similar amount in the next financial year.