Income tax, or capital gains

ColdIron

pip895 wrote: »

I have always done the same. If you do end up with acc units though how do you find out the income element?

You will receive a consolidated tax certificate annually that gives you UK and overseas dividends. You should also get a schedule of dividends with a breakdown

Sea_Shell

Can you utilise both Income tax and Capital gains allowances if you have no, or very little income? Or are they independent?

ColdIron

Yes you can, they are independent. You can use your income allowance for your income and also your capital gains allowance for your gains regardless of your income. You can also use your dividend allowance for dividends and the various savings allowances for your savings interest

Sea_Shell

Sorry, i meant can you add them together...if you say have made gains of £17000, but only have say £2000 of income?

ColdIron

As far as I know - Unused personal allowances cannot be set against chargeable gains. Perhaps someone else could confirm

bowlhead99

Sea_Shell wrote: »

Sorry, i meant can you add them together...if you say have made gains of £17000, but only have say £2000 of income?

No. The £2000 of income means you have no income tax to pay because it's well within your allowances, but doesn't give you any help on the CGT side.

The £11,300 a year annual capital gains tax exemption means you are exempt from capital gains tax on the first £11,300 of net gains (gains in excess of losses) that you make in a year. If you have £11,300 of exempt gains and £5,700 of gains which are taxable (adding to your £17,000 total gains), the fact that you didn't use up your various income tax allowances doesn't stop those £5700 taxable capital gains being taxable under the capital gains regime (at 10% in that particular case, assuming they are from investment funds rather than from, say, residential investment property).

Obviously if you cash in some of the assets this year and some next year you might not go over the £11,300 exemption in either of those years and therefore have no tax to pay, but simply having lots of 'spare' income tax allowances doesn't help.