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Where Taxpayers and Advisers Meet

Income tax allowance and CGT

flatree
Posts: 7
Joined: Wed Sep 02, 2015 11:14 am

Income tax allowance and CGT

Postby flatree » Wed Jun 07, 2017 5:06 pm

My wife and I sold a jointly-owned second property in the 2016-17 tax year. I had originally bought the property in 1996 and gifted her half in 2014-15. My wife had negligable income in 2016-17 (less than £1000 from savings interest). When working out her CGT, does she include the unused income tax allowance as well as the CGT allowance? Her share of the sale is as follows: sale price £105,000, purchase price £14,000, purchase plus sale fees £1500, improvements £5000, her other income for 16-17 was essentially £0, CGT allowance £11,100. How much CGT will she pay?

Many thanks

maths
Posts: 7594
Joined: Wed Aug 06, 2008 3:25 pm

Re: Income tax allowance and CGT

Postby maths » Thu Jun 08, 2017 12:45 pm

When working out her CGT, does she include the unused income tax allowance as well as the CGT allowance?
No.

Using your figures at face value and assuming these relate to wife only then:
Gain = 105,000 - [14,000 + 1,500 + 5,000] - 11,100 = 73,400.

CGT = 18% x 73,400 = 13,212.

simpsonite
Posts: 103
Joined: Wed Jun 24, 2009 11:58 am

Re: Income tax allowance and CGT

Postby simpsonite » Tue Jun 20, 2017 2:10 pm

.....except not all of the £73,400 gain is liable at 18%.
the element that takes her above basic rate threshold (32k for 16/17) is liable to the top rate of 28%.

so based on no other income £41,400 @ 28% = £11,592
£32,000 @18% = £5,760


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