Maxed out ISA - capital gains on GIA

Marcusian

I have had a bit of a windfall, well from my own business growth, which has meant I am about to max out my £20k s and s ISA with Vanguard. 

I have a freetrade GIA and want to invest in more speculative things, for a bit of fun, learning and potential upside*. Anyway, my understanding was that I wouldn't be liable to capital gains tax under a certain amount? I am talking doing 50-100 a month on things I have an interest in, so nothing huge. 

Also - I read that any dividends can be subject to tax? I ask as I have recently gone LTD company and will be using my tax free dividend bit for paying myself. 

*I am not looking for people to take me to task about this, this is a little bit of 'fun' pocket money to aid my learning and still look to invest beyond my 20k ISA. 

Sorry, if have misread this. I have to admit, the idea I would max out my ISA was scarcily believable only 12 months ago.

george4064

Capital gains allowance is £12,300, after which gains are taxed. More info here: https://www.gov.uk/capital-gains-tax

Dividend allowance is £2,000, after which dividends are taxed. More info here: https://www.gov.uk/tax-on-dividends

Marcusian

george4064 said:

Capital gains allowance is £12,300, after which gains are taxed. More info here: https://www.gov.uk/capital-gains-tax

Dividend allowance is £2,000, after which dividends are taxed. More info here: https://www.gov.uk/tax-on-dividends

As i thought when i read this. So the essentially as long as I invest in non-dividend paying stocks (I cannot use any of my divvy allowance as I need it for my LTD company) and the gains arent more than £12.3k I am ok?

eskbanker

Marcusian said:

george4064 said:

Capital gains allowance is £12,300, after which gains are taxed. More info here: https://www.gov.uk/capital-gains-tax

Dividend allowance is £2,000, after which dividends are taxed. More info here: https://www.gov.uk/tax-on-dividends

As i thought when i read this. So the essentially as long as I invest in non-dividend paying stocks (I cannot use any of my divvy allowance as I need it for my LTD company) and the gains arent more than £12.3k I am ok?

To use the usual expression, don't let the tax tail wag the investment dog!  In other words, don't let taxation of dividends be an unduly significant influence on your investment decisions, especially if it's just 'fun money'....

Marcusian

eskbanker said:

Marcusian said:

george4064 said:

Capital gains allowance is £12,300, after which gains are taxed. More info here: https://www.gov.uk/capital-gains-tax

Dividend allowance is £2,000, after which dividends are taxed. More info here: https://www.gov.uk/tax-on-dividends

As i thought when i read this. So the essentially as long as I invest in non-dividend paying stocks (I cannot use any of my divvy allowance as I need it for my LTD company) and the gains arent more than £12.3k I am ok?

To use the usual expression, don't let the tax tail wag the investment dog!  In other words, don't let taxation of dividends be an unduly significant influence on your investment decisions, especially if it's just 'fun money'....

a good point - truthfully i wanted to invest in some dividend paying companies, some EM/Small cap ETFs maybe, basically stuff that isn't in my FTSE Global All Cap Index Fund which makes up 100% of my ISA. 

The issue is regarding my limited company - i am going to pay myself a fair amount of dividends via that and would want to use the tax free portion for that.

eskbanker

Yes, I get that you're planning to use your dividend 'allowance' on your limited company distributions but for dividends that are taxed it's only at 7.5% if you're at basic rate, so in the general scheme of things that's not a big issue!

As an aside, are you making the most use of your limited company money for paying into a pension as this is typically very tax-efficient for money you won't need until retirement?

Marcusian

eskbanker said:

Yes, I get that you're planning to use your dividend 'allowance' on your limited company distributions but for dividends that are taxed it's only at 7.5% if you're at basic rate, so in the general scheme of things that's not a big issue!

As an aside, are you making the most use of your limited company money for paying into a pension as this is typically very tax-efficient for money you won't need until retirement?

I am paying some yes, but I don't make enough to have a shed load tied up like that until I am 55 (i am 38, so i bet it's not 55 by the time i am). I do want my money available to me as I am looking at a few opportunities to buy a gym.