Hi all - new here and seeking some advice to clarify the research I've already done...getting organised in advance of what I think will be a larger than usual tax bill for me in January 2020:
In 2013 I purchased an asset and claimed the full amount of £10000 under AIA. I sold the item this year for a profit, for £14000.
My understanding is that I will have to add a £14000 balancing charge for my 18/19 tax return. Is this correct?
A few further questions:
1) is capital gains tax also payable on the £2300, which falls over the AEA?
2) I am a basic rate tax payer, but this balancing charge will push me up over into the higher rate. Is the balancing charge counted as profit like any other, and so will be taxed at 40%? Seems bad luck, since I only received basic rate tax relief back in 2013!
3) if there is capital gains tax to pay, this also be at the higher rate or not?
Guidance would be gratefully accepted, thanks! As I said, keen to avoid any nasty surprises by being prepared now.
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