Capital Gains Tax and Student Loans

neil7953

Hello

I wanted some advice or views on the payment of Student loans from CGT.

I have an occupational pension for which I have no need to complete a HMRC self assessment.

In previous years I have undertaken some self employed worked and so completed to SA however not gone over the Student loan payment threshold.

In normal circumstances an occupational pension is not considered earnings for calculation repayments for my Student Loan.

I have just sold a second property (A Furnished Holiday let) for which I will pay CGT at 10%.

 My question is can Capital Gains Tax be considered earnings in relation to the payment of Student Loans.

Ed-1

neil7953 said:

Hello

I wanted some advice or views on the payment of Student loans from CGT.

I have an occupational pension for which I have no need to complete a HMRC self assessment.

In previous years I have undertaken some self employed worked and so completed to SA however not gone over the Student loan payment threshold.

In normal circumstances an occupational pension is not considered earnings for calculation repayments for my Student Loan.

I have just sold a second property (A Furnished Holiday let) for which I will pay CGT at 10%.

 My question is can Capital Gains Tax be considered earnings in relation to the payment of Student Loans.

How can something you pay out be considered income (money you get in)?

Dazed_and_C0nfused

I think the op means will the Capital Gain be treated as income when it comes to calculating how much student loan repayment they need to make.

Zanderman

No.  Student loan repayments are collected via income tax.

Capital Gains Tax is completely different and has no relationship to income tax or to student loans.

Malthusian

The capital gain is not in itself income for student loan repayment purposes.
However, if you have to submit a self assessment tax return, the occupational pension can be taken into account for student loan repayments. 
From your description it sounds as if this doesn't matter either as your income is below the threshold. The capital gain won't take you over it. 

Zanderman said:

Capital Gains Tax is completely different and has no relationship to income tax or to student loans.

"No relationship" is overstating it a bit:

• The rate of capital gains tax you pay can depend on your income (capital gains tax sits above income).
• Suppose the OP's only income was the occupational pension and it was over the student loan repayment threshold. In "normal circumstances" they would not pay graduate tax because although their income is over the threshold, they are not required to file a self assessment return, and student loan repayments are not deducted at source from occupational pensions.
  If they sell assets and this triggers the need for a self assessment tax return, they now will have to make a student loan repayment based on their pension income. 
  So the sale of assets has indirectly given rise to a liability for graduate tax - but on the occupational pension, not the capital gain itself.

neil7953

Hi and thanks for these replies.

My pension sits below the SLC repayment figures and I have not done a SA this year as I have no other earnings.
You are correct the pension is not considered income however if I were to do a SA to declare other income it does become money earned by HMRC.
I suppose what I,m asking is Can the proceeeds from a sale for which I will pay CGT be seen as an income for Student Loan repayment.

When I put in a form declaring CGT this month I am just hoping this will stand alone and I can simply pay the CGT. 

neil7953

Apologies Malthusian youve explained this already 
Suppose the OP's only income was the occupational pension and it was over the student loan repayment threshold. In "normal circumstances" they would not pay graduate tax because although their income is over the threshold, they are not required to file a self assessment return, and student loan repayments are not deducted at source from occupational pensions. 
If they sell assets and this triggers the need for a self assessment tax return, they now will have to make a student loan repayment based on their pension income. 
So the sale of assets has indirectly given rise to a liability for graduate tax - but on the occupational pension, not the capital gain itself.

Malthusian

neil7953 said:

I suppose what I,m asking is Can the proceeeds from a sale for which I will pay CGT be seen as an income for Student Loan repayment.

No.