Personal allowance and shares

ooo-boogar

Hi
I know selling shares are liable for CGT. But what I don't know but have spent ages trying to find an unequivocal answer online, is does the amount you receive count against your personal allowance too?
I don't imagine it does but I don't want to assume anything.
To complete the picture, I'm not working or receiving a pension, but in order to make full use of my personal allowance, intend to make an early withdrawal from a pension and need to know this to maximise the amount whilst not exceeding my allowances (n.b. the share gain will be 3k and therefore within the cgt allowance).
Thanks in advance for your help.

ooo-boogar

Hi
I know selling shares are liable for CGT. But what I don't know but have spent ages trying to find an unequivocal answer online, is does the amount you receive count against your personal allowance too?
I don't imagine it does but I don't want to assume anything.
To complete the picture, I'm not working or receiving a pension, but in order to make full use of my personal allowance, intend to make an early withdrawal from a pension and need to know this to maximise the amount whilst not exceeding my allowances (n.b. the share gain will be 3k and therefore within the cgt allowance).
Thanks in advance for your help.

Nomunnofun1

No - it doesn’t. You have an annual exemption of £3000. You also have a personal allowance of £12570 which cannot be allocated to or affected by Capital Gains. 

elsien

Duplicate post. 

https://forums.moneysavingexpert.com/discussion/6618639/personal-allowance-shares#latest

noitsnotme

Nomunnofun1 said:

No - it doesn’t. You have an annual exemption of £3000. You also have a personal allowance of £12570 which cannot be allocated to or affected by Capital Gains. 

*edit* Please ignore, I was incorrect.

I’m pretty sure if you have not used some or all of your personal allowance, it can be used to offset capital gains.  The examples here show the capital gain is reduced first by capital gains allowance (£3000) and the remainder is added to your total income.  You then subtract the personal allowance from that total income.

https://www.gov.uk/capital-gains-tax/rates

So theoretically, if you have zero other income, you could make a capital gain of £15570 and pay no tax (£12570 + £3000).

Others will confirm or correct my assumption.

noitsnotme

@ooo-boogar I’ve just re-read your post… Are you sure capital gains is relevant in your situation?  Withdrawing funds from a pension is usually classed as income.  Or do you mean you will be withdrawing from your pension AND separately selling some shares in the same tax year?

Nomunnofun1

noitsnotme said:

Nomunnofun1 said:

No - it doesn’t. You have an annual exemption of £3000. You also have a personal allowance of £12570 which cannot be allocated to or affected by Capital Gains. 

I’m pretty sure if you have not used some or all of your personal allowance, it can be used to offset capital gains.  The examples here show the capital gain is reduced first by capital gains allowance (£3000) and the remainder is added to your total income.  You then subtract the personal allowance from that total income.

https://www.gov.uk/capital-gains-tax/rates

So theoretically, if you have zero other income, you could make a capital gain of £15570 and pay no tax (£12570 + £3000).

Others will confirm or correct my assumption.

No - you absolutely CANNOT set unused personal allowances against capital gains! 

This comment ‘

 You then subtract the personal allowance from that total income’

Incorrect. This is calculated first to determine how much of the basic rate band has been utilised at sources where the personal allowance CAN be utilised. 

Read the article again - as suggested in the link heading it deals with capital gains RATES when including other income against which the personal allowance CAN be utilised.

Your final assumption could not be more incorrect! Capital gains on your example would be £12570 at 18%. The personal allowance of £12570 would unused!

noitsnotme

Nomunnofun1 said:

noitsnotme said:

Nomunnofun1 said:

No - it doesn’t. You have an annual exemption of £3000. You also have a personal allowance of £12570 which cannot be allocated to or affected by Capital Gains. 

I’m pretty sure if you have not used some or all of your personal allowance, it can be used to offset capital gains.  The examples here show the capital gain is reduced first by capital gains allowance (£3000) and the remainder is added to your total income.  You then subtract the personal allowance from that total income.

https://www.gov.uk/capital-gains-tax/rates

So theoretically, if you have zero other income, you could make a capital gain of £15570 and pay no tax (£12570 + £3000).

Others will confirm or correct my assumption.

No - you absolutely CANNOT set unused personal allowances against capital gains! 

Read the article again - as suggested in the link heading it deals with capital gains RATES when including other income against which the personal allowance CAN be utilised.

Your final assumption could not be more incorrect! Capital gains on your example would be £12570 at 18%. The personal allowance of £12570 would unused!

I stand corrected.  My understanding was incorrect.