Capital gains tax and state pension in self assessment.

Thursday123

Hello. Could you help me. My sister who is currently a landlord is transferring her rented property to my niece in the new year. According to HMRC rules calculating capital gains tax in a self assessment computation involves total income which includes gross salary+ rental income less allowances + capital gain. That's ok. However, my sister also receives state pension. Am I correct in saying that state pension received gross will also have to be added into the total income amount on the self assessment to determine the final capital gains tax figure.

Also, if my sister was receiving a workplace/occupational pension would that also be included in total income on a self assessment computation for CGT purposes.

 

eskbanker

Yes, state pension is taxable income, even though any income tax liability isn't deducted by PAYE, and likewise, other pensions are taxable income, except for any tax-free lump sums.