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Where Taxpayers and Advisers Meet

HELP RE CAPITAL GAINS TAX PLEASE

Harry9
Posts: 9
Joined: Mon Dec 10, 2018 12:49 pm

HELP RE CAPITAL GAINS TAX PLEASE

Postby Harry9 » Fri Nov 08, 2019 10:01 am

Hi,
If any Capital Gains Tax expert can help me I would be grateful

If I have £250,000 in Investment Funds and decide to sell what CGT am I liable for as a 20% tax payer?
Is the tax only based on profits from the investments and not the whole value?

Are stocks and shares ISA's free from all tax if sold.

Should I leave my house to my children in my will, valued at £300K but cost £100K would that be liable for any tax such as CGT

Thank You

Harry9
Posts: 9
Joined: Mon Dec 10, 2018 12:49 pm

Re: HELP RE CAPITAL GAINS TAX PLEASE

Postby Harry9 » Fri Nov 08, 2019 10:07 am

Sorry forgot to mention, are you still liable for CGT after your death?

AnthonyR
Posts: 303
Joined: Wed Feb 08, 2017 2:33 pm

Re: HELP RE CAPITAL GAINS TAX PLEASE

Postby AnthonyR » Fri Nov 08, 2019 11:00 am

You're taxable on the gain, being the difference between acquisition price and sale proceeds (less costs of sale and purchase). This is often complicated by the fact that income may have been reinvested which increases your original costs. If you're working with an investment manager they should be able to tell you the taxable gain.

Your first £12,000 of gains is tax free, gains after this will initially be taxable at 10% on investments until you've used up the rest of your basic rate band (so if you earn £30,000 you've got another £20,000 of gains before you fill your £50,000 basic rate band). After that the gains at taxable at 20%.

However, any investments held in an ISA wrapper are exempt from income tax and CGT.

There's no capital gains on death, although there is inheritance tax (which is at 40%, but with higher allowances). Your beneficiaries will receive the investments at current market value when you die so they will only pay CGT on future growth.

Your personal IHT position is that you have a £325,000 nil rate band, plus £150,000 residence nil rate band (rising to £175,000) if you leave your home to your kids/grandkids, so effectively £500k tax free from next year.

If you are widowed and your spouse left everything to you the above allowances could be doubled (although the double residence nil rate band would be capped at the value of your home - £300k) resulting in no IHT due (assuming your investments and home are the only major assets).
Anthony Rogers LLB CTA TEP
Fusion Partners LLP
anthony@fusionpartners.co.uk

Harry9
Posts: 9
Joined: Mon Dec 10, 2018 12:49 pm

Re: HELP RE CAPITAL GAINS TAX PLEASE

Postby Harry9 » Fri Nov 08, 2019 2:35 pm

Thanks Anthony for answering my questions.

One more thing which may sound a little stupid, how do they collect the CGT, do they adjust your tax code or simply send you a bill for the tax owing in the post?
Is it my responsibility to inform the tax man about any investment sales or do the company I deal with do it?

pawncob
Posts: 4390
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: HELP RE CAPITAL GAINS TAX PLEASE

Postby pawncob » Sat Nov 09, 2019 7:17 pm

You complete a tax return with the gain entered in the relevant section and HMRC will notify you of the tax due (31st January in year following the return)
With a pinch of salt take what I say, but don't exceed your RDA


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