offset CGT

sheerwaters

Hi We have just sold a BTL property and went to an account for some advice however they didnt seem too knowledgeable on ways to offset except- you have to pay it. Can I lower my gross pay to take me out of higher band by taking it out and putting it into my work Pension? I know its a basic question but in general is this possible?

MX5huggy

Yes you can but the Capital Gain is counted towards which band you are in, so it might make no difference to the CGT you pay. 

If your income is £60000 and the CG is 112300 (just to keep it easy so after the £12300 allowance it’s £100k.) you would pay 28% on the 100k so £28k. 

If after pension contributions you get your income down to £40000 on the difference between £40000 and £50270 (£10270) you’ll pay 18% on the rest you’ll be back at 28%.

Basicly it’s good to contribute as much as you can to pension you’ll save loads of tax, if you can live off the BTL profit for a number of years and make substantial pension contributions over those years crack on 

Maybe put some real numbers in a reply and we can give concrete random opinions from the internet (advice).