Does the Personnel Savings Allowance get reduced if CGT takes you over the Higher Rate Threshold

polyphonic99

Hi,

Does the Personal Savings Allowance get reduced if a capital gain, liable to CGT, takes you over the Higher Rate Tax Threshold?

The Personal Savings Allowance is £1000 if your income is below the Higher Rate Tax Threshold of £50,271, and the PSA  is reduced by £500 if your income is above that.

I have a Captial Gain liability for 2023/24, that together with my annual income, takes me £300 above the HRT of £50,270.

The Capital gain is on a property, so I assume I will have to pay 24% on that £300 above the HRT, , but do I also lose £500 of my Personal Savings Allowance due to the effects of the Capital Gain and thus incur an additional tax liability of £100 as well?

Thanks in advance for your help.

eskbanker

No, the level of your taxable income influences the rate of CGT payable, but it doesn't work in both directions, i.e. a chargeable gain doesn't impact income tax liability.

polyphonic99

Thanks for your help, and apolgies for saying that the higher rate of CGTf or 23/24 was 24%, it was still 28%, and only came down to 24% from 2024/25