Reasons for having to do self assessment.

scoobyjones1

I am currently not submitting a self assessment to HMRC and would rather not have to, as I believe once you start you have to do it every year.
My question is, what are the reasons for having to do one? There seem to be a few grey areas.
Obviously if you are above the £3k CGT allowance you will need to file one.
I had previously put a lot of savings into a general, investment account.
I have been trying to empty that for the last 2-3 years but it keeps going up! Shares in Tesla, Nvidia and the like have made high returns...some over 250% but I also have a few loss making shares.
So I have been selling these shares, gains and losses and gifting my Spouse some so as to use my £3k CGT allowance and hers, total £6k.
I may be close to having sold more than £50k's worth of shares in this account. I can find nothing about that level on the HMRC checklist "do I need to complete self assessment" or whatever it's called.
However I have read on here and elsewhere that you must complete self assessment if the total proceeds from share sales exceeds £50k....even though some of that may include shares sold at a loss and that no CGT is due.
One thing HMRC does say also is that you have to complete self assessment if you earn more than £10k from savings, dividends and shares.
I am presuming there that they mean £10k in profit from those...because some I may sell have made losses....and I have managed to get some of these funds out and into ISAs and a small SIPP.

Then there are dividends.
I am close to the new £500 allowance for dividend earnings.
I am not a tax payer as have no other earnings, waiting for my state pension, so I understand there should be zero tax owed if I go just over the £500 but do I have to start doing a self assessment if it goes over the £500 limit?
Sorry that's a lot of points but I'm sure a lot of people must be confused about this...
and it's Sunday...so hopefully people have the time to help and discuss these points.
Many thanks.

Dazed_and_C0nfused

scoobyjones1 said:

I am currently not submitting a self assessment to HMRC and would rather not have to, as I believe once you start you have to do it every year.
My question is, what are the reasons for having to do one? There seem to be a few grey areas.
Obviously if you are above the £3k CGT allowance you will need to file one.
I had previously put a lot of savings into a general, investment account.
I have been trying to empty that for the last 2-3 years but it keeps going up! Shares in Tesla, Nvidia and the like have made high returns...some over 250% but I also have a few loss making shares.
So I have been selling these shares, gains and losses and gifting my Spouse some so as to use my £3k CGT allowance and hers, total £6k.
I may be close to having sold more than £50k's worth of shares in this account. I can find nothing about that level on the HMRC checklist "do I need to complete self assessment" or whatever it's called.
However I have read on here and elsewhere that you must complete self assessment if the total proceeds from share sales exceeds £50k....even though some of that may include shares sold at a loss and that no CGT is due.
One thing HMRC does say also is that you have to complete self assessment if you earn more than £10k from savings, dividends and shares.
I am presuming there that they mean £10k in profit from those...because some I may sell have made losses....and I have managed to get some of these funds out and into ISAs and a small SIPP.

Then there are dividends.
I am close to the new £500 allowance for dividend earnings.
I am not a tax payer as have no other earnings, waiting for my state pension, so I understand there should be zero tax owed if I go just over the £500 but do I have to start doing a self assessment if it goes over the £500 limit?
Sorry that's a lot of points but I'm sure a lot of people must be confused about this...
and it's Sunday...so hopefully people have the time to help and discuss these points.
Many thanks.

No idea where you have got some of those ideas from.

You don't have to file a return for ever, if you no longer meet the criteria then you would normally stop filing a return.

There is no specific "allowance" for dividends but there is a 0% rate band (confusingly called the Dividend Allowance).  But you can only use that once your Personal Allowance (£11,310 or £12,570) has been used up.  

HMRC would like you to file a return if your dividend income reaches £10,000.

masonic

First let's dispel a myth. Once you start filing tax returns you do not need to continue doing so if you have no ongoing reason to stay in self-assessment. You can tell HMRC you don't need to complete a return, or they may pro-actively remove you. Some people who wanted to fill out a tax return have even been taken off against their will.

If you just need to report some capital gains or disposals above the £50k threshold, then you may have the option of the 'real time' capital gains service: https://www.gov.uk/report-and-pay-your-capital-gains-tax/if-you-have-other-capital-gains-to-report

You have to register for self assessment if you earn more than £10k income from savings and investments. This is different than capital gains or losses.

ColdIron

scoobyjones1 said:
However I have read on here and elsewhere that you must complete self assessment if the total proceeds from share sales exceeds £50k....even though some of that may include shares sold at a loss and that no CGT is due.

Do both of the following apply to you?

• You still need to report your gains in your tax return if both of the following apply:
• the total amount you sold the assets for was more than £50,000
• you’re registered for Self Assessment

https://www.gov.uk/capital-gains-tax/work-out-need-to-pay

Surely your total proceeds would include losses

GeoffTF

ColdIron said:

scoobyjones1 said:
However I have read on here and elsewhere that you must complete self assessment if the total proceeds from share sales exceeds £50k....even though some of that may include shares sold at a loss and that no CGT is due.

Do both of the following apply to you?

• You still need to report your gains in your tax return if both of the following apply:
• the total amount you sold the assets for was more than £50,000
• you’re registered for Self Assessment

https://www.gov.uk/capital-gains-tax/work-out-need-to-pay

Surely your total proceeds would include losses

The total proceeds is the amount that you received by selling your shares (less any allowable costs). Your capital gain is the total proceeds minus the capital gains tax base cost of the shares that you sold.

scoobyjones1

ColdIron said:

scoobyjones1 said:
However I have read on here and elsewhere that you must complete self assessment if the total proceeds from share sales exceeds £50k....even though some of that may include shares sold at a loss and that no CGT is due.

Do both of the following apply to you?

• You still need to report your gains in your tax return if both of the following apply:
• the total amount you sold the assets for was more than £50,000
• you’re registered for Self Assessment

https://www.gov.uk/capital-gains-tax/work-out-need-to-pay

Surely your total proceeds would include losses

No, this is another reason why I do not want to start with the self assessment, it brings other rules once you start.
As I understand it...and thanks to your kind help...I will not have to complete a SA form because even if I have sold shares over 50k, but without going over the CGT allowance, I am not already doing SA so as you say, both conditions do not reply.
Many thanks.

scoobyjones1

masonic said:

First let's dispel a myth. Once you start filing tax returns you do not need to continue doing so if you have no ongoing reason to stay in self-assessment. You can tell HMRC you don't need to complete a return, or they may pro-actively remove you. Some people who wanted to fill out a tax return have even been taken off against their will.

If you just need to report some capital gains or disposals above the £50k threshold, then you may have the option of the 'real time' capital gains service: https://www.gov.uk/report-and-pay-your-capital-gains-tax/if-you-have-other-capital-gains-to-report

You have to register for self assessment if you earn more than £10k income from savings and investments. This is different than capital gains or losses.

Yes, I understand that thanks. It's not necessarily for ever.
So as I understand it, if I am disposing of old shares, bought with old savings, some have made gains and some losses... that is not income? The gain would be below the 3k allowance anyway.

wmb194

scoobyjones1 said:

masonic said:

First let's dispel a myth. Once you start filing tax returns you do not need to continue doing so if you have no ongoing reason to stay in self-assessment. You can tell HMRC you don't need to complete a return, or they may pro-actively remove you. Some people who wanted to fill out a tax return have even been taken off against their will.

If you just need to report some capital gains or disposals above the £50k threshold, then you may have the option of the 'real time' capital gains service: https://www.gov.uk/report-and-pay-your-capital-gains-tax/if-you-have-other-capital-gains-to-report

You have to register for self assessment if you earn more than £10k income from savings and investments. This is different than capital gains or losses.

Yes, I understand that thanks. It's not necessarily for ever.
So as I understand it, if I am disposing of old shares, bought with old savings, some have made gains and some losses... that is not income? The gain would be below the 3k allowance anyway.

Income = interest, dividend, PIDs, income from work and the like. You have zero% allowances for dividends and interest.

Including shares, capital gains and losses are made when selling assets. You have an annual £3k CGT tax free allowance.

scoobyjones1

Any interest and dividends made would be well below the £10k that HMRC say you need to file a self assessment. I may have swapped a few shares around at one time but I am not doing it as a profession, the sales I made were in order to get the money out of a general investment account and into ISAs, because they decimated the CGT allowance, twice! So I don't think I should need to submit a self assessment at the moment. Thanks all.

masonic

If you have any interest or dividend income from your GIA, then that is something you will need to report to HMRC if it exceeds your PSA or dividend "allowance". But not through self assessment.

singhini

OP
a reason to do SA might be that you are a 40% tax payer and perhaps putting large amounts into a SIPP
i put £20k in and the SIPP provider claims 20% relief
I then have to do SA and claim back the other 20%  

Well i was a 40% tax payer years ago