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Where Taxpayers and Advisers Meet

Taxable income, rental income and CGT from sales of UK property

andrewlato81
Posts:12
Joined:Sun May 15, 2016 10:28 pm
Taxable income, rental income and CGT from sales of UK property

Postby andrewlato81 » Thu Mar 24, 2022 1:07 pm

Hello all,

I have a questions on calculation of 2021/22 income tax.
My current income situation for 21/22 is as follows:
income (work) 43500
rental income 7500
also a gain from sale of property in Sept 21 £7500 (all allowances and breaks taken into account) with approx £1450 in CGT paid already (assumed basic rate TP at the time of CGT submission)

My income from both work and rentals will come to just short of £51k this year, which will require CGT adjustment(top up payment). I am still in position to reduce my overall income to around £50k with AVC towards my pension, to stay within 50270. Am I right in my thinking-If I was to do that the CGT payment would not be adjusted to 28%?

Or is it that my gain from sale of property of £7500 is to be added to overall income(£51k) and will still push me into HT bracket causing CGT adjustment from paid 18% to 28% ?

Thank you all for your input
Andre

entax
Posts:3
Joined:Tue Mar 29, 2022 9:48 am

Re: Taxable income, rental income and CGT from sales of UK property

Postby entax » Tue Mar 29, 2022 10:00 am

Hi Andre,

The disposal will be put through the UK rate bands so for example if your net income is £50,000 and you are entitled to the full personal allowance (£12,570), your income and gain will be allocated as follows:

£37,250 @ 20% (work+rental income less personal allowance)
£450 @ 18% (gain using up the remainder of the basic rate band £37,700)
£7,050 @ 28% (gain using up the higher rate band)

Many thanks,

Emma

andrewlato81
Posts:12
Joined:Sun May 15, 2016 10:28 pm

Re: Taxable income, rental income and CGT from sales of UK property

Postby andrewlato81 » Fri Apr 01, 2022 1:26 pm

Thank you for your reply Emma,
Much appreciated
Andre


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