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Where Taxpayers and Advisers Meet

income tax and capital gains

jakedew77
Posts:1
Joined:Sat Apr 03, 2021 10:44 am
income tax and capital gains

Postby jakedew77 » Sat Apr 03, 2021 10:46 am

Hi, is capital tax because it ital gains tax in the same bracket as income tax, so lets say i earn 12,500 a year in the income tax bracket i do not pay as under the amount but then i earn 5000 in the capital gains tax bracket and i pay no tax on that either because it is under the taxable amount is this how it work or do both tax brackets coincide with each other

darthblingbling
Posts:698
Joined:Wed Aug 02, 2017 9:09 pm

Re: income tax and capital gains

Postby darthblingbling » Sat Apr 03, 2021 12:25 pm

The annual exempt allowance is separate to the personal allowance. So if you earn £50000 from your job during the tax year and have £10,000 in gains, you'd pay no tax on your gains.

The basic rate tax band is shared tho with income tax getting first bite. So if in the above scenario you made £20000 in gains, you'd pay basic rate tax on your employment income after your personal allowance, and the higher rates of CGT on your gains after using your annual exempt allowance.


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