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Where Taxpayers and Advisers Meet

CGT on bond withdrawl/surrender

Cannelloni
Posts:1
Joined:Wed Jun 27, 2018 10:19 am
CGT on bond withdrawl/surrender

Postby Cannelloni » Wed Jun 27, 2018 10:28 am

A family member has recently sold their second property and will have a significant chunk of CGT to pay on it due to having inherited it a very long time ago. At the same time they would like to make a lump sum withdrawal on a bond, which would currently be tax free as they have not made many withdrawals over the 20+ years the bond has existed so have a lot of rolled up allowance and they are a basic rate tax payer. However, I'm wondering if doing so at the same time as having sold the property will alter that and whether it is best for them to wait until the following tax year? I'm not sure if these will be linked by HMRC or how this works - any thoughts would be very much appreciated.

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: CGT on bond withdrawl/surrender

Postby maths » Thu Jun 28, 2018 8:58 pm

Any gain on the bond (a UK bond i assume) will be subject to income tax only if the taxpayer (when the gain is included) is exposed to income tax at the higher or additional rates of income tax; otherwise no income tax charge.

Any CGT charge is irrelevant to the above but the gain on the bond may cause the rate of CGT on the property gain to be increased.


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