Investment Bond Captial Gains Tax query

masonic

christmaspudding81 said:

Thank you for this - I will read this article it is an uk bond opened in 2016 - a figure of £35,000k would be my share of the tax already paid I think leaving around 90K left liable for captial gains tax  - would this be paid at 20% or 45% ie what someone who is a higher earner would pay  ? I am reading this -  "For higher earners * I am not but this will take me into the bracket for one year*  the levy is currently 24% on gains from selling additional property, or 20% on profits from other assets like shares"

If there's only £90k liable for income tax not capital gains tax, then with your other income at £25k, it would seem you will end up in the 40% tax bracket rather than the 45% tax bracket, so the additional tax you'd pay is 40% - 20% = 20%. So £18k before considering any relief, assuming I've understood everything correctly. If there have been no withdrawals since 2016, then it could be a good deal less than that.

DRS1

christmaspudding81 said:

Ie how can the captial gain tax be £50000 on a 130000 bond for the approx capital gains tax I need to pay to tax man > It sounds so high have I been misinformed by the financial advisor - this isn't direct from Pru I am getting so much information on internet it's so confusing  - is it 45% or 20% and does it cover the intial investment?

@masonic gave you a very helpful link.  You should read that.

You are not paying CGT.  It is income tax but basic rate tax has already been paid.  So the rate could be 45% - 20% or 40% - 20% or even no tax at all.  And then there is the top slicing thing.

Maybe you should be talking to your solicitor about this?  Or asking them for the name of a reliable IFA.