Tax calculation help please

Jitter

The completion of a sale of a second property is imminent, CGT will be due and I have been trying to calculate the amount due as I think some will be payable at the higher rate, but making heavy weather of it!
Rather than show my half baked attempts at working out which would probably confuse matters the figures (all to end 20/21 tax year) are;
 PAYE salary  £6600.00
Pension £8820
Dividend £7800 (from my own UK limited company)
CGT from sale of second property (estate agent and solicitors fees deducted) £42,000
If anyone can help I would be very grateful.

shaundiamonds

At a rough estimate based on your income, it looks like you would be paying £3,440 CGT

shaundiamonds

The calcs are:

First £12,300 are tax-free.

£25,000 taxed at 10%: £2,500

£4,700 taxed at 20%: £940

Dazed_and_C0nfused

Where does the £25,000 come from?

shaundiamonds

Dazed_and_C0nfused said:

Where does the £25,000 come from?

£42,000 profit on property sale

Dazed_and_C0nfused

shaundiamonds said:

Dazed_and_C0nfused said:

Where does the £25,000 come from?

£42,000 profit on property sale

I'm not saying it's wrong I just don't understand why the amount taxed at 10% is exactly £25,000

Jeremy535897

You have £15,420 earnings/pension, and £5,800 taxable dividends after the allowance, less £12,500 personal allowance, leaving £8,720 taxable at basic rate, so the basic rate band available against capital gains (assuming you are in England) is £37,500 less £8,720, which is £28,780. If your net gain is £42,000, you deduct the allowance of £12,300, leaving £29,700 taxable (assuming no other gains or losses). £28,780 is taxed at 18% (assuming this is residential property), and £920 is taxed at 28%, the total CGT being £5,438. See https://www.gov.uk/capital-gains-tax/rates

You have to report and pay the tax within 30 days of completion. See https://www.gov.uk/capital-gains-tax/report-and-pay-capital-gains-tax

Dazed_and_C0nfused

All the dividends are taxable, it's just £2,000 are taxed at 0% but that £2,000 uses up part of the basic rate band for other purposes, does that not apply to Capital Gains?

Jeremy535897

Dazed_and_C0nfused said:

All the dividends are taxable, it's just £2,000 are taxed at 0% but that £2,000 uses up part of the basic rate band for other purposes, does that not apply to Capital Gains?

Yes, I had forgotten that, so the tax bill is £5,638. (The rules are unnecessarily complicated.)

Jitter

Jeremy535897 said:

Dazed_and_C0nfused said:

All the dividends are taxable, it's just £2,000 are taxed at 0% but that £2,000 uses up part of the basic rate band for other purposes, does that not apply to Capital Gains?

Yes, I had forgotten that, so the tax bill is £5,638. (The rules are unnecessarily complicated.)

Thanks Jeremy and Dazed and Confused, not just me that finds it complicated then!
I am resident in England and it is residential property, I rounded the figures but can do the precise calculation myself now following the example above.

uknick

Jeremy535897 said:

Dazed_and_C0nfused said:

All the dividends are taxable, it's just £2,000 are taxed at 0% but that £2,000 uses up part of the basic rate band for other purposes, does that not apply to Capital Gains?

Yes, I had forgotten that, so the tax bill is £5,638. (The rules are unnecessarily complicated.)

tax complicated, surely not