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Where Taxpayers and Advisers Meet

Calculating CGT when only other income is a dividend

coltcc
Posts:7
Joined:Fri Dec 21, 2012 6:59 am
Calculating CGT when only other income is a dividend

Postby coltcc » Fri Dec 16, 2016 4:10 pm

Hi all
Been Googling and getting nowhere on this
My situation for 2016-17: one dividend from my company of £28k
So I calculated my tax liability as: £28k less £11.1k PA less £5k dividend allowance = £11.9k. At 7.5% that's a tax bill of about £900
So far so good (?)
But I also want to sell some assets (not property or shares), realising a capital gain
I am trying to figure out how much capital gain I can realise without tripping into higher tax brackets (I don't mind maxing out the 10% CGT band)
The assets are divisible so I can sell pieces up to some limit, I just can't figure out the limit!
Do I still have my £11k capital gain allowance, so can I sell £11k worth tax-free?
Thanks for any help, much appreciated

MichCat
Posts:39
Joined:Sat Dec 10, 2016 5:01 pm

Re: Calculating CGT when only other income is a dividend

Postby MichCat » Fri Dec 16, 2016 5:38 pm

You could realise £26,100 and only pay CGT at 10%.

Dividend £28k less personal allowance of £11k = £17k taxable. You have a basic rate band of £32k.

£5k @ 0% dividend allowance
£12k @ 7.5% balance of dividend
£15k @ 10% capital gains (£26.1k less 11.1k allowance)
-------
£32k

coltcc
Posts:7
Joined:Fri Dec 21, 2012 6:59 am

Re: Calculating CGT when only other income is a dividend

Postby coltcc » Fri Dec 16, 2016 8:02 pm

Crystal clear, thank you very much!

SteLacca
Posts:448
Joined:Fri Aug 07, 2015 2:17 pm

Re: Calculating CGT when only other income is a dividend

Postby SteLacca » Mon Dec 19, 2016 3:44 pm

As an aside, although dividends form the top slice of income when considering tax rates, capital gains sit above dividends, and so if you did stray into the HR band you would be charged at 20% rather than 32.5% (assuming that the gains do not arise from residential property).


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