Income+Dividend+CGT

[MickyV]

I am interested in "which order" the three taxes are assessed and hope somebody can help.

This year (17/18) I expect to earn £40k from regular income, plus £20k in Capital Gain on a second property. I can also pay myself a £5k Dividend from my business. I understand that my £5k Dividend should be tax-free.

If I am able to consider my Capital Gain BEFORE my Dividend, what would leave me with £5k still of my Basic Rate band so I pay 18% on the first £5k of my Capital Gain and 28% on the other £15k. However, if I have to consider the Dividend first, although tax-free it will still eat up my Basic Rate band so I have to pay 28% on all £20k of my Capital Gain.

Which is correct, please?

[bd6759]

CGT rates are always treated as if they were the last source of income.

[MickyV]

CGT rates are always treated as if they were the last source of income.

Thank you

On the HMRC Website it says:

How you pay tax on dividends
How you pay depends on the amount of dividend income you got in the tax year.

Less than £5,000
You don’t need to do anything or pay any tax.

Does that mean I do not have to include it on my Self Assessment Return? (In which case it will calculate the first £5k of my Capital Gain at Basic Rate)

[wamstax]

You must still show the dividend income but the first 5000 is effectively charged at a nil rate

[MickyV]

Thank you