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Where Taxpayers and Advisers Meet

Capital Gains Tax Bands

KevinBarnes
Posts:1
Joined:Thu Apr 07, 2022 2:25 pm
Capital Gains Tax Bands

Postby KevinBarnes » Thu Apr 07, 2022 2:29 pm

I know that that the amount of tax paid on the sale of investment properties is dependent on which tax band you’re in. My only income is from my rentals, and I’m selling one of my properties, and so my question is: if my income is, for example, £55,000, but I have £10,000 of tax deductible expenses (service charges, maintenance) etc. Would I be classed as a higher or basic rate tax payer? Many thanks!

maths
Posts:8507
Joined:Wed Aug 06, 2008 3:25 pm

Re: Capital Gains Tax Bands

Postby maths » Fri Apr 08, 2022 4:05 pm

Tax year 2021/22

Net income from rents = 55,000 - 10,000 = 45,000

PA 12,570

Taxable income 32,430 (taxed at 20%)

Basic rate (20%) applicable up to 37,700.

Therefore capital gains (net of annual exempt amount of 12,300) are subject to CGT at 18% on [37,700 - 32,430] of gains, ie 18% of 5,270, plus 28% on balance of gains.


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