Single with 2, 12yo, 14yo kids - planning early retirement

Lu999

Hi
Help me to understand if the estimates are correct 
Planning early retirement/pause due to health issue (not a disability , mental health/menopause etc)


Salary: 0
Interest: 600 (last year)
Dividend: 13000 (last year)
Capital Gains: 10000 (Guess, need to sell 20k, 50% from capital gains)


Total Income = 13600
Personal Allowance : 12,570
Taxable Income  = 13600 - 12570 = 1030 

Tax
Income Tax = 1030*20% = 206
CGT = 10,000 * 10% = 1000

Total tax = 1206.

That leaves me with around 32k

Thanks
Luc

kempiejon

Not sure that looks right.
Aren't dividends taxed at 8.75% or is that after personal allowance?
Then there's a starting rate of up to £5,000 of interest and not have to pay tax on it.
https://www.gov.uk/apply-tax-free-interest-on-savings

sheramber

Capital Gains Tax is separate from Income Tax and is taxed separately.

Iti is not assessed as part of your total income for income tax.

Dazed_and_C0nfused

Assuming you haven't applied for Marriage Allowance then there wouldn't be any tax to pay on that income.

Your Personal Allowance could be allocated to the dividend income, leaving £430 to be taxed at the dividend nil rate (0%).

And the interest would then be taxed at 0% as well (the savings starter rate).

Have you factored in the CGT Annual Exempt Amount??

Jeremy535897

Will you make capital gains of £10,000 every year? These numbers look low to support two relatively young children on your own.

Albermarle

Lu999 said:

Hi
Help me to understand if the estimates are correct 
Planning early retirement/pause due to health issue (not a disability , mental health/menopause etc)


Salary: 0
Interest: 600 (last year)
Dividend: 13000 (last year)
Capital Gains: 10000 (Guess, need to sell 20k, 50% from capital gains)


Total Income = 13600
Personal Allowance : 12,570
Taxable Income  = 13600 - 12570 = 1030 

Tax
Income Tax = 1030*20% = 206
CGT = 10,000 * 10% = 1000

Total tax = 1206.

That leaves me with around 32k

Thanks
Luc

It is not clear how much your investment capital is, but must be pretty big.
Are you aware that the normal rule of thumb is that you should not take more than 4% of your original capital each year, if you want to be pretty sure it will not run out if you live to a ripe old age ?
It is only a guideline and can be more ( but not by much ) or less depending on other factors.

xylophone

How old are you?

Are you mortgage free?

Are you solely responsible for financing the children's needs?

Do you have private or occupational pension provision?

Have you checked your state pension forecast?

https://www.gov.uk/check-state-pension