Yet another CGT question

in Cutting tax
9 replies 181 views
ouraggieouraggie Forumite
263 Posts
Tenth Anniversary 100 Posts Combo Breaker I've been Money Tipped!
Forumite
Hi. I am about to sell a second home. Bought for £120k in 2008, should fetch about £180k now. My question is, if i sell it in ,say, August 2022 i have almost no other income so far in this tax year. However, if i earn anything AFTER I have sold the cottage and paid my CGT bill,  will i need to pay further CGT at some point because of that? 
I hope my question makes sense. I have searched but not found the answer anywhere.

Replies

  • edited 30 May 2022 at 11:57AM
    purdyoaten2purdyoaten2 Forumite
    3.4K Posts
    Seventh Anniversary 1,000 Posts Photogenic Name Dropper
    Forumite
    edited 30 May 2022 at 11:57AM
    You have a Capital Gains allowance of 12300 AND a personal income tax allowance of 12570. If you were to earn more than 12570 after you have submitted your capital gains computation (on the basis that you have no other taxable income) you will pay additional capital gains tax. For example, if you earned 13570, 1000 over the personal allowance, that would mean that 1000 more of the gain should have been taxed at 28% as opposed to 18%, an extra £100 of tax.
    ADIOS 🙋♂️

    (Ha sido divertido)
  • NorthYorkieNorthYorkie Forumite
    86 Posts
    10 Posts First Anniversary
    Forumite
    I wouldn't deliberately avoid generating income this year, you will still be better off!. Sometimes it's better to pay the tax.
  • diystarter7diystarter7 Forumite
    5.2K Posts
    1,000 Posts First Anniversary Name Dropper
    Forumite
    Slightly OT but if anyone is gifting NorthYorkie said:
    I wouldn't deliberately avoid generating income this year, you will still be better off!. Sometimes it's better to pay the tax.

    property to a member of the family etc, do it over two tax years so you get two allowances IMO but check first as i was advised of this by someone I know. 

  • Keep_pedallingKeep_pedalling Forumite
    13.4K Posts
    Eighth Anniversary 10,000 Posts Name Dropper Photogenic
    Forumite
    You have a Capital Gains allowance of 12300 AND a personal income tax allowance of 12570. If you were to earn more than 12570 after you have submitted your capital gains computation (on the basis that you have no other taxable income) you will pay additional capital gains tax. For example, if you earned 13570, 1000 over the personal allowance, that would mean that 1000 more of the gain should have been taxed at 28% as opposed to 18%, an extra £100 of tax.
    Are you sure about that? The 28% rate is for HR tax payers not basic rate payers.
  • Jeremy535897Jeremy535897 Forumite
    9.8K Posts
    1,000 Posts Third Anniversary Name Dropper
    Forumite
    The gain is sufficiently large to use the basic rate band, so if there is any taxable income, that will increase the amount of the capital gain taxable at 28%.
  • purdyoaten2purdyoaten2 Forumite
    3.4K Posts
    Seventh Anniversary 1,000 Posts Photogenic Name Dropper
    Forumite
    You have a Capital Gains allowance of 12300 AND a personal income tax allowance of 12570. If you were to earn more than 12570 after you have submitted your capital gains computation (on the basis that you have no other taxable income) you will pay additional capital gains tax. For example, if you earned 13570, 1000 over the personal allowance, that would mean that 1000 more of the gain should have been taxed at 28% as opposed to 18%, an extra £100 of tax.
    Are you sure about that? The 28% rate is for HR tax payers not basic rate payers.
    Yes as Jeremy says - the gain is £60000!
    ADIOS 🙋♂️

    (Ha sido divertido)
  • diystarter7diystarter7 Forumite
    5.2K Posts
    1,000 Posts First Anniversary Name Dropper
    Forumite
    You have a Capital Gains allowance of 12300 AND a personal income tax allowance of 12570. If you were to earn more than 12570 after you have submitted your capital gains computation (on the basis that you have no other taxable income) you will pay additional capital gains tax. For example, if you earned 13570, 1000 over the personal allowance, that would mean that 1000 more of the gain should have been taxed at 28% as opposed to 18%, an extra £100 of tax.
    Are you sure about that? The 28% rate is for HR tax payers not basic rate payers.
    Yes as Jeremy says - the gain is £60000!
    100% spot on.
  • Keep_pedallingKeep_pedalling Forumite
    13.4K Posts
    Eighth Anniversary 10,000 Posts Name Dropper Photogenic
    Forumite
    You have a Capital Gains allowance of 12300 AND a personal income tax allowance of 12570. If you were to earn more than 12570 after you have submitted your capital gains computation (on the basis that you have no other taxable income) you will pay additional capital gains tax. For example, if you earned 13570, 1000 over the personal allowance, that would mean that 1000 more of the gain should have been taxed at 28% as opposed to 18%, an extra £100 of tax.
    Are you sure about that? The 28% rate is for HR tax payers not basic rate payers.
    Yes as Jeremy says - the gain is £60000!
    Sorry, my misunderstanding of the answer.
  • Jeremy535897Jeremy535897 Forumite
    9.8K Posts
    1,000 Posts Third Anniversary Name Dropper
    Forumite
    You have a Capital Gains allowance of 12300 AND a personal income tax allowance of 12570. If you were to earn more than 12570 after you have submitted your capital gains computation (on the basis that you have no other taxable income) you will pay additional capital gains tax. For example, if you earned 13570, 1000 over the personal allowance, that would mean that 1000 more of the gain should have been taxed at 28% as opposed to 18%, an extra £100 of tax.
    Are you sure about that? The 28% rate is for HR tax payers not basic rate payers.
    Yes as Jeremy says - the gain is £60000!
    Sorry, my misunderstanding of the answer.
    Understandable. I thought about replying as you did, but then realised why it wasn't necessary to do so.
Sign In or Register to comment.
Latest MSE News and Guides

British Gas prepay meter users...

...to pay less for gas from 1 April

MSE News

The 'odd Easter flavours' thread 2023

What bizarre food stuffs have you spied?

MSE Forum

Energy Price Guarantee calculator

How much you'll likely pay from April

MSE Tools