CGT to Pay

[jgoldman]

Please can you help clarify a question. In the tax year 2016/2017 I sold total chargeable assets (funds and shares) of more than £44,000 but had gains of less than £11,100. I'm a basic rate tax payer. Will I have to pay CGT? Included in these assets is bed and SIPP and a bed and ISA. HMRC ask me to declare it but will I pay 10% on the amount over the £44,000

Thanks for your comments
Jeremy

[FigNewton]

They will only tax you on the gains. If these are less than £11,100 then there is no tax. The £44,000 number is there simply because they want people with large asset sales to give specific details. If you dispose of less than £44,000 in total then you do not have to provide specific details of proceeds, cost base, date, etc.

[jgoldman]

Thanks. So I need to complete the CGT section but I won't have to pay any tax. Since I'm not paying any tax would I get into problems if I don't declare it.

Kind regards,
Jeremy

[FigNewton]

I think it is best to declare. HMRC have alternative ways of knowing what capital gains you have obtained in the year. You will want avoid the possibility that your return does not tally up with HMRC records. Also, I never know what future years might hold. If there were to be something, in say 2019-20, which prompts HMRC to look back at my prior year returns, I want to be able to show them that those were completed accurately.

[jgoldman]

Thanks for your advice

[bd6759]

The law (s3A TCGA 1992) says that where the gains are less than the AEA, and the total of all proceeds are less than four times the AEA, a statement to that effect is sufficient to satisfy the s8 notice.

[jgoldman]

I'm not sure what the AEA is. While my gains are less than £11,100 the total disposed assets are greater than £44,400. Is the AEA the £11,100?

Kind regards,
Jeremy

[bd6759]

Annual Exempt Amount. £11,100 for 2016-17. You are required to report the disposals in your tax return.

[jgoldman]

Thanks. It just puzzles me why I need to when I won't be taxed on it.