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Where Taxpayers and Advisers Meet

Tax Rates

LesCG
Posts: 3
Joined: Wed Mar 13, 2019 4:52 pm

Tax Rates

Postby LesCG » Tue May 07, 2019 2:55 pm

I have been looking at the Government Guidance on CGT rates on the disposal of residential property (not the tax payers residence).
I note that a person paying higher rate income tax pays 28%. For basic rate payers, Official guidance says "if the amount is within the basic income band you'll pay 18% on residential property. You'll pay 28% on residential property on any amount above the basic tax rate".
Am I right in interpretting this to mean that any part of the gain added to taxable income but within the basic rate band (currently £50,000) is chargeable at 18% and the balance above that is charged at 28%?
For instance if the gain is £70,000 and the taxable income is £40,000 CGT is charged at 18% on £10,000 and 28% on £60,000

Thank you

Leslie Green

robbob
Posts: 2827
Joined: Wed Aug 06, 2008 4:01 pm

Re: Tax Rates

Postby robbob » Tue May 07, 2019 3:03 pm

Am I right in interpretting this to mean that any part of the gain added to taxable income but within the basic rate band (currently £50,000) is chargeable at 18% and the balance above that is charged at 28%?
For instance if the gain is £70,000 and the taxable income is £40,000 CGT is charged at 18% on £10,000 and 28% on £60,000
Yes and Yes - both correct - however do note that each individual has their "annual capital gains tax free allowance each year - so if your actual gain is 70k and your allowance is not used up elsewhere then the gain used in your calcs will be 70k-12k (tax free allowance) = 58k and not 70k - i am guessing you have already reduced calcs for this 12k tho.

https://www.gov.uk/capital-gains-tax/allowances


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