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Where Taxpayers and Advisers Meet

Question asked on my self assessment

Tony71
Posts:7
Joined:Wed Mar 17, 2021 12:17 am
Question asked on my self assessment

Postby Tony71 » Thu May 13, 2021 9:31 am

Hi,

This question is asked on my self assessment.

"If your net income is over £50,000 select 'Yes', otherwise select 'No'.
Step 1 - Work out your 'net income'. Add up your taxable income, include things such as: income from employment including any company benefits, profits from self-employment, taxable social security benefits, pensions including the State Pension, savings and dividends above the tax free allowance, rental income."

I don't understand if in this amount will be included also one-off capital gains, this is not mentioned in the list of examples and there's another dedicated section later for it.

Can you help?

Thanks!

robbob
Posts:3100
Joined:Wed Aug 06, 2008 4:01 pm

Re: Question asked on my self assessment

Postby robbob » Thu May 13, 2021 10:13 am

I am presuming you are in the child benefit question section here ?? - not sure where step 1 is detailed (i don;t have acces to hmrc online submision version easily so it may be there ?)
I don't understand if in this amount will be included also one-off capital gains, this is not mentioned in the list of examples and there's another dedicated section later for it.
I can confrim that capital gain are ignored here as a capital gain income is ignored when it come to working out whether there is the adverse tax charge ref income for capital gains purposes.


Note if you have any doubts here and know that you would have to pay the child benefit tax charge due to having higher income and a claim has ben made i would recommend if you have the slightest doubts entering the figures as if income was more than 50k - checking that 9inclusion affect calculation generated before submitting if you are doing online submision - the system should self check before submisison and confrim if your income is over 50k - that is potentially more reliable than you trying to work out how the 50k is arrived at !! - if there is an issue you don't undertand (unexpected liability) you have the opportunity to check with hmrc or post back here.

Once you are happy there is no tax charge simply change that section back to No before submision

for paper return you cant self check but if you do enter and income is less than 50k that wont adversely affect your tax calc like it would do if you get tyour calcs wrong and miss of by mistake

Unfortuantely its ahighly technical calculation that should have a full list of yes no items with notes - i dont think that useful complete list exists ??

Note any pension payments made direct by you or deducted from your net pay (ie with hmrc adding aetra relief directly into your pension pot) - reduce your income ref this child benefit question hmrc seem to have conveniently for them not mention this reduction in that section you quoted.

Tony71
Posts:7
Joined:Wed Mar 17, 2021 12:17 am

Re: Question asked on my self assessment

Postby Tony71 » Thu May 13, 2021 3:15 pm

Thank you so much Robbob, you couldn't have been more helpful than this. I solved my doubts. I did exactly what you suggested and that's right, capital gains are ignored there. Even if I declare YES to the question "net income is over £50,000", the system does its calculations and doesn't count my capital gain (it comes from a one-off disposal of a business asset in 20/21).
I tell you more, to double check, on top of that I did one more test, leaving the YES to that question and adding more income to reach the limit of 50k. In this other case yes, the system counts income over 50k and adds in the final calculation the request to refund part of the child benefit paid.

Thanks a lot!!


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