How much CGT does a non-taxpayer pay?

Adb1986

I am a non-tax payer and am looking at selling some shares that I own.    Will I have to pay tax on profit above the £3,000 CGT threshold or can I combine my £12,750 tax allowance and the £3,000 CGT allowance ? 

eskbanker

It isn't possible to apply income tax allowances against capital gains tax liabilities, they're two separate regimes (albeit the rate of CGT is influenced by how much income you have).

Isthisforreal99

Adb1986 said:

I am a non-tax payer and am looking at selling some shares that I own.    Will I have to pay tax on profit above the £3,000 CGT threshold or can I combine my £12,750 tax allowance and the £3,000 CGT allowance ? 

No, your personal allowance doesn't come into it.

You will pay 18% on any gain over £3000.

ColdIron

You spread can the sales into separate years to take advantage of the annual allowance. Can you make use of your partner's allowance?

infinityx

Not to hijack the thread but I'm in similar situation with my wife. we have all world index (accumulation). I was thinking whether it would be better to put it into a distributing index instead since dividend income is much lower and utilises the personal allowance right? isa is already full hence this would be the only source of income.

Dazed_and_C0nfused

infinityx said:

Not to hijack the thread but I'm in similar situation with my wife. we have all world index (accumulation). I was thinking whether it would be better to put it into a distributing index instead since dividend income is much lower and utilises the personal allowance right? isa is already full hence this would be the only source of income.

If you have unused Personal Allowance then yes, dividend income can use that.

And the first £500 above any unused Personal Allowance is currently taxed at 0%.

infinityx

Dazed_and_C0nfused said:

infinityx said:

Not to hijack the thread but I'm in similar situation with my wife. we have all world index (accumulation). I was thinking whether it would be better to put it into a distributing index instead since dividend income is much lower and utilises the personal allowance right? isa is already full hence this would be the only source of income.

If you have unused Personal Allowance then yes, dividend income can use that.

And the first £500 above any unused Personal Allowance is currently taxed at 0%.

yes currently no income. but she does have about 15k in capital gains from selling shares that we put into ISA. so anticipate tax on that at 18%. my understanding is capital gains are not part of income so doesn't factor into the dividend tax calculation correct?

Dazed_and_C0nfused

infinityx said:

Dazed_and_C0nfused said:

infinityx said:

Not to hijack the thread but I'm in similar situation with my wife. we have all world index (accumulation). I was thinking whether it would be better to put it into a distributing index instead since dividend income is much lower and utilises the personal allowance right? isa is already full hence this would be the only source of income.

If you have unused Personal Allowance then yes, dividend income can use that.

And the first £500 above any unused Personal Allowance is currently taxed at 0%.

yes currently no income. but she does have about 15k in capital gains from selling shares that we put into ISA. so anticipate tax on that at 18%. my understanding is capital gains are not part of income so doesn't factor into the dividend tax calculation correct?

Income tax is calculated first and then CGT.

CGT liability is in part dependent on how much basic rate band she has available and dividends taxed at 0% would use some of that.  But that doesn't look like it will have any impact on her situation.

infinityx

Dazed_and_C0nfused said:

infinityx said:

Dazed_and_C0nfused said:

infinityx said:

Not to hijack the thread but I'm in similar situation with my wife. we have all world index (accumulation). I was thinking whether it would be better to put it into a distributing index instead since dividend income is much lower and utilises the personal allowance right? isa is already full hence this would be the only source of income.

If you have unused Personal Allowance then yes, dividend income can use that.

And the first £500 above any unused Personal Allowance is currently taxed at 0%.

yes currently no income. but she does have about 15k in capital gains from selling shares that we put into ISA. so anticipate tax on that at 18%. my understanding is capital gains are not part of income so doesn't factor into the dividend tax calculation correct?

Income tax is calculated first and then CGT.

CGT liability is in part dependent on how much basic rate band she has available and dividends taxed at 0% would use some of that.  But that doesn't look like it will have any impact on her situation.

thank you for helping clarify

TheGreenFrog

infinityx said:

Not to hijack the thread but I'm in similar situation with my wife. we have all world index (accumulation). I was thinking whether it would be better to put it into a distributing index instead since dividend income is much lower and utilises the personal allowance right? isa is already full hence this would be the only source of income.

If you have the acc fund outside your ISA then, assuming the fund has income to accumulate, you will receive notice each year of the amount accumulated which will count towards your dividend allowance (with income tax on surplus).  But you can also add this accumulated income to the purchase cost of the fund for CGT purposes.  If you held the income version then the tax effect is similar to the acc version but easier from an admin point of view.

HedgehogRulez

Surely a non tax payer will pay no tax?