Do capital gains erode starter rate for savings?

aroominyork

Example: income of £15,000 so can earn savings interest of £1000+£2570 without being taxed on it. If you have capital gains of £2570 or more does that count as income and wipe out the starter rate, or do the two have nothing to do with each other?

Dazed_and_C0nfused

Capital Gains is the final slice taxed so doesn't impact the savings starter rate band.

But the savings starter rate uses some of the basic rate band so could impact CGT in some instances.

aroominyork

Could you please give an example of the starter rate band impacting CGT?

Dazed_and_C0nfused

Taxable income £15,000 (£10,600 State Pension plus £4,400 interest).

Personal Allowance is only £11,310 due to an application for Marriage Allowance.

State Pension and part of the interest is covered by the Personal Allowance and the remaining interest of £3,690 is taxed at 0% (savings starter rate).

Capital Gain (not residential property) of £50k after deducting the annual exemption.

First £34,010 of the gain is taxed at 10% and the balance at 20%.

If none of the basic rate band had been used then £37,700 would have been taxed at 10%.

The above assumes no RAS pension contributions have been made.