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Do You Pay Income Tax on Capital Gain?
PoGee
Posts: 621 Forumite
in Cutting tax
This is an extension to my initial thread.
My capital gain is less than the capital gains threshold so no capital gains tax. My main income is as an nhs worker, where I pay income tax as PAYE + NI/superannuation. I also have a rental property and do a self assessment which encompasses everything and it's usually bang on 20% on the profit from rental income - the extra tax, over PAYE, that I pay.
This year, the profit will be around £6k so will need to pay the tax owed for 2020/21 + payment on account. I'm fairly ok with understanding that aspect.
This is my very first time (30+ years tax payer) of having a capital gain so not too clued up on that. My question is - would my approx. £7k capital gain be added to my £6k rental profit, so that I pay income tax (I know there will be no Capital Gains Tax) on £13k?
My capital gain is less than the capital gains threshold so no capital gains tax. My main income is as an nhs worker, where I pay income tax as PAYE + NI/superannuation. I also have a rental property and do a self assessment which encompasses everything and it's usually bang on 20% on the profit from rental income - the extra tax, over PAYE, that I pay.
This year, the profit will be around £6k so will need to pay the tax owed for 2020/21 + payment on account. I'm fairly ok with understanding that aspect.
This is my very first time (30+ years tax payer) of having a capital gain so not too clued up on that. My question is - would my approx. £7k capital gain be added to my £6k rental profit, so that I pay income tax (I know there will be no Capital Gains Tax) on £13k?
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Comments
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Hi,no, income tax is a tax on earned income.1
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The tax free allowances for Capital Gains (12300) and income (12570) are entirely separate and, yes, you can avail of both.1
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Thanks again fellow Moneysavingexpert forum members. I can chill out at weekend now
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