Capital Gearing Dividends - CGT

Capital Gearing Dividends - CGT

Best deals to access real time data!
Level 2 Basic
Monthly Subscription
for only
Monthly Subscription
for only
UK/US Silver
Monthly Subscription
for only
VAT not included
Stock Name Stock Symbol Market Stock Type Stock ISIN Stock Description
Capital Gearing Trust Plc CGT London Ordinary Share GB0001738615 ORD 25P
  Price Change Price Change % Stock Price Last Trade
10.00 0.22% 4,520.00 09:49:52
Close Price Low Price High Price Open Price Previous Close
4,520.00 4,520.00 4,520.00 4,510.00
more quote information »
Industry Sector

Capital Gearing CGT Dividends History

Announcement Date Type Currency Dividend Amount Period Start Period End Ex Date Record Date Payment Date Total Dividend Amount

Top Dividend Posts

gengulphus: Does anyone else out there think CGT might be an easy target for the chancellor in his quest to fill the financial black hole caused by Covid? I don't. A target, quite possibly - but not an easy target... It's not easy because to a large extent, CGT is a voluntary tax - make changes designed to raise more CGT from investors, and investors are likely to respond by changing their strategies to be more likely to hold on to investments carrying a large unrealised capital gain rather than selling them and realising the gain... Doing that won't always be possible - sometimes people need the cash or the sale is compulsory for one reason or another - but I suspect there will be plenty who shift to a long-term buy & hold strategy if CGT becomes a serious burden... Also, the investors most likely to want not to do that are those who use shorter-term 'trading' strategies. But many of them will have bought their shares last year and so will be sitting on plenty of unrealised losses, not gains... He might remove the £12300 allowance, he might increase rates, he might do both. Removing the CGT allowance strikes me as very unlikely, at least as things stand. Why? Because then everybody who makes even a small capital gain becomes liable to account for CGT, either in a tax return or using some sort of adjustment to their tax code - but that adjustment is likely to change every year, in a hard-to-predict way, so would require some sort of annual return from the taxpayer anyway. Either way, there would be a big increase in the number of CGT returns HMRC would need to process, quite often for very small amounts of tax collected - so removing the CGT allowance entirely would probably not be cost-effective because of high collection costs relative to the amount of tax collected. And in addition, it would also have high political costs for the government - a CGT return is a distinctly user-unfriendly bit of bureaucracy and making large numbers of voters do them who hadn't had to before is likely to alienate a considerable number of voters! That said, I do think reducing the CGT allowance might be an option for the Chancellor. E.g. halving it rather than removing it entirely would affect far fewer taxpayers and would tend to be focussed on those with the largest capital gains among those who currently don't pay CGT, as well as producing a substantial increase in CGT collected from those who do currently pay CGT. That's more likely to be cost-effective from the Chancellor's point of view, both with regard to collection costs and political costs. And increasing CGT rates is also an option. But both reducing the allowance and increasing rates are going to be limited in terms of how much they're likely to raise, due to the 'largely a voluntary tax' nature of CGT mentioned above. Various parts of that assume that the structure of CGT and collecting it remain largely as they are at present, and there are possibilities available for more fundamental revisions of CGT that would change the argument. For instance, brokers cannot currently give definitive statements about what capital gains and losses have been realised by sales in a broker account they provide, because if the accountholder has other holdings of a share (either certificated or held with another broker), CGT rules require the capital gains and losses to be calculated from the merged transaction record for all the holdings, not separately for each holding and the results added together. If CGT were revised to work on a 'separately on each holding and add together' basis, it would become possible for brokers to produce definitive CGT statements, and therefore for the government to require them to do so. And if that were done, CGT returns by individual taxpayers could become just a matter of taking the figures from each broker they use and adding them up - much as they handle dividends at present. That would be likely to reduce the costs significantly, both collection costs and political costs. Another example of a fundamental revision that might be attractive to the Chancellor is finding some way to tax all gains, whether realised or not (though the attractiveness of that might not be all that high at present, given recent losses...). But both of these fundamental revisions have a whole mass of practical detail to be designed - for example, how are transfers from one broker to another handled? how are certificated holdings handled? what happens if someone has big unrealised gains on shares that for some reason they cannot sell? and many others... So while fundamental reform of the CGT system might be a way for the Chancellor to effectively target CGT as a source of significant extra tax revenues, I'm pretty sure it's not an easy way for him to do so. Gengulphus
gengulphus: azalea, If I do not exceed my annual Capital Gains tax allowance, do I still have to declare to HMRC the number of shares I have bought and sold in the tax year? If HMRC require you to fill in a tax return, the instructions for doing so are in - that's the version that accompanies the paper tax return because I cannot give any equivalent link for the online tax return. The rules for the two types of tax return are essentially the same, though, so it does give you the answer about whether you should fill in the capital gains part of the online tax return: "7 Capital gains summary Fill in the ‘Capital gains summary’ pages and attach your computations if: • you sold or disposed of chargeable assets which were worth more than £48,000 • your chargeable gains before taking off any losses were more than £12,000 • you want to claim an allowable capital loss or make a capital gains claim or election for the year • you were not domiciled in the UK and are claiming to pay tax on your foreign gains on the remittance basis • you’re chargeable on the remittance basis and have remitted foreign chargeable gains of an earlier year • you sold or disposed of an interest in UK land or property and were not resident in the UK or you were a UK resident and overseas during the disposal • you submitted a Real Time Transaction return on the disposal of an asset and have not paid the full amount of Capital Gains Tax" The first three of those are the important ones for most people (the next three are only important for those with complications due to foreign residence, domicile, etc, and the last is something I've never come across). Together, they mean that in order to avoid having to fill in the Capital Gains part of the tax return, the total proceeds of your sales must be at most four times the CGT allowance and the total gains of your profitable sales (i.e. without offsetting the losses of your loss-making sales) must be at most the CGT allowance. For the first of those, the proceeds of a sale are the number of shares sold times the price obtained per share, without deducting broker commission or any other incidental costs - so a bit more than the final amount credited to your account for the sale. So you can be required to fill in the Capital Gains part of a tax return even though you don't have any CGT to pay, and since filling it in also requires you to submit your CGT computations, yes, you can be required to give numbers of shares sold along with other details of the sales, as well as similar details of the purchases of those shares (which could be in either the same tax year or in previous tax years, and can even be in the following tax year in some cases where the '30 day rule' is involved). There are basically three situations in which you have no CGT to pay but have to fill in the Capital Gains part of a tax return, or want to: A) Your total proceeds from sales for a tax year exceed four times the CGT allowance but your total gains (without offsetting losses) from the profitable sales are under the CGT allowance. B) Your total gains (without offsetting losses) from the sales for a tax year are over the CGT allowance, but you have enough losses (or other claims or elections) from those sales to be able to offset them to below the CGT allowance and so pay no CGT. C) Your losses from the sales for a tax year are greater than your gains from those sales, so you can offset all the gains and still have losses remaining. In situations A) and B), you have to fill in the Capital Gains part of the tax return if you're asked to submit one. In situation C), you're not obliged to fill it in, but you probably want to, because you can carry the net losses remaining after offsetting all the gains forward to future tax years, and they will eventually save you CGT unless you die before the opportunity for them to do so arises. (I should add that the rules for using losses brought forward from earlier tax years are a bit more generous than those for losses from sales in the same tax year: they don't have to be used offsetting gains that are already under the CGT allowance.) That leaves the case that HMRC haven't required you to submit a tax return. In that case, you're not legally required to submit one immediately, but you do have to check whether you have Income Tax and/or CGT to pay for the tax year, and if so, to notify HMRC of that situation ( ). HMRC are able to react to such a notification in various ways, but one reasonably likely one is that they'll require you to submit a tax return. In situation A), you don't have CGT to pay, so unless you have Income Tax to pay, AFAIAA you're not obliged to do anything if HMRC don't require you to submit a tax return. Situation B) is trickier. The issue is that you need to offset losses in order to have no CGT to pay, but you have to 'claim' a loss by telling HMRC about it to be able to use it to offset gains. So one way or another you need to tell HMRC the details of the losses, and it's at least reasonably likely that that will eventually lead to HMRC requiring you to submit a tax return. Situation C) is again a case of wanting to tell HMRC about the situation in order to 'claim' the losses concerned. There's a time limit on doing so: a loss that hasn't been 'claimed' by 4 years after the end of the tax year in which the sale happened can no longer be 'claimed'. So there's no immediate need to inform HMRC of the details, but there is a need to do so eventually (note that once 'claimed', there's no deadline for actually using the loss to offset gains, other than your death). Gengulphus
gengulphus: stasper, My daughter decided in May 2019 to invest an amount of 44,000 GBP into an Interactive Brokers margin account and, on my advice, has been dealing exclusively in US listed stocks. During the tax year 2019-2020 there were around 200 positions opened and closed. Because of the stock market crash in February, there is an estimated net loss of 4,000 GBP which she intends to report in her tax return. I am now trying to help her with her CGT, and we are both finding the situation quite complicated. Fortunately, we found excellent advice in this forum, for which I am grateful to the members and especially to you, Gengulphus. At this point, and having read the relevant posts, I think I understand pretty well the part which has to do with the disposal of the stocks themselves, including the same day and the 30 days rule. I have familiarized myself with the standard calculators and I am pretty confident that I did this part of the calculation correctly. And then comes the acquisition and disposal of the US currency during the buy and sell transactions. I read very carefully the excellent example posted by Gengulphus 8 years ago (on 28 Feb 2012). ... Not a major problem, but for future reference it's much easier for readers to locate a past post if you give its number (236 in this case) than if you give its date. And even easier if you give a direct link to it ( in this case). ... However, I still have questions: 1) I have the problem of applying the suggestions in the post to a MARGIN account. With a margin account, purchasing shares does not reduce the already existing capital, but is done on borrowed capital, and there I cannot see how to apply Gengulphus's suggestions. Can you please help? My feeling is that a margin account is equivalent to a non-margin account plus a loan facility, and will be taxed accordingly. And I suspect that a foreign-currency loan facility won't be taxed by CGT because every time you draw down on it, you're acquiring a matching asset (the foreign currency) and liability (the obligation to repay it). But I'm way out of my depth here, so don't take any of that as an answer to your question - it's at most a suggestion that might indicate where the answer lies, and equally might not. And equally, please do note that my old post number 236 that you mention indicates in several places that I wasn't at all certain about what I was saying! About the only things I feel I can say with reasonable certainty is that if faced with a similar problem, I would (a) find and employ a tax accountant to do the job for me, at least for one year to pick up how it should be done; (b) think very hard about whether I really wanted all the CGT hassle created by trading foreign shares frequently in an unsheltered account! (Personally, I wouldn't want to trade foreign shares frequently at all - but if I did want to do it, I would make certain I did it in an ISA or SIPP...) 2) There are about 200 individual sales of stocks during the tax year. Supposing that we solve the problem of how to deal with the foreign currency, I guess there will be an equal number of disposals of foreign currency, resulting in more than 400 total disposals. Am I correct in this? ... Sorry, but I have nothing to add to what I said in my old post number 236, including still being just as uncertain about all the uncertainties I expressed in it. Basically, I've had very little experience of CGT on foreign shares in the last eight years since it was posted, and that little was just a handful of very straightforward cases. ... And with each disposal having an average value of 8,000 GBP, we would have to report a figure of around 3,200,000 GBP for the total proceeds. All this from an account which started with 44,000 GBP and ended up with 40,000 GBP. Won't this look strange to HMRC or are they used to encountering such large numbers from moderate sized accounts? I would think there are enough people trying to make money on the stockmarket by short-term trading rather than longer-term investing that they'll be used to disposals being a large multiple of the account value. A factor of 80 is probably towards the high end, but I doubt that it's anywhere near the largest they've encountered! Gengulphus
gengulphus: jeffian, I have just had a rather unpleasant shock, although this may come as no surprise to the thread experts. My wife held shares in a family company from way before 1982. That company was taken over in 1998 for shares and cash and the acquiring company has itself now been taken over in a cash-only bid. We had constructed a spreadsheet in 1998 to establish the base cost of the shares, starting with the known March 1982 value and adjusting for various transactions - additions, disposals, Rights issues and so on - including, of course, indexation. I am aware that indexation was frozen at 1998 and removed in 2008 but, having had the calculations back from my accountant, I wasn't aware that the indexation element of the 1998 cost was actually withdrawn and the base cost for CGT purposes goes back to the cost of the original holding. This smacks of retrospective taxation, surely? This change took effect in April 2008, as part of a package of CGT simplifications that came into effect then. Basically, that package almost entirely (*) got rid of indexation and taper relief, and reduced the CGT rates from the individual's marginal Income Tax rate to the current 10% up to one's unused basic-rate Income Tax band, 20% above that (a few years later, an extra 8% was added to both of those rates if the asset is residential property, and that remains the case today). So basically, the simplifications increased gains by removing the inflation/long-holding-period increments to base cost provided by indexation and taper relief, but reduced the rates at which the gains were taxed. IIRC, the government of the time justified this with the argument that overall, the increase and the decrease roughly balanced out, so that there was little overall effect on CGT raised, and so they weren't retrospectively raising more tax... But as far as individuals are concerned, yes, those changes in 2008 acted retrospectively, and the effects were definitely not guaranteed to cancel out: typically, someone who made massive gains over a period of less than three years benefited greatly from the rate cuts and wouldn't anything to lose from the abolition of indexation and taper relief (unless they could count the asset as a 'business asset'). Whereas someone who made modest, roughly inflation-equalling gains over many years might well have had gains before 1998 cancelled out by indexation and gains after 1998 reduced to below the CGT allowance, for no CGT to pay before the changes, and have found themselves liable to CGT on a gain that exceeded the CGT allowance after it... (It does incidentally seem particularly perverse that a Labour government made tax changes that benefited speculators who got rich quick and penalised steady long-term investors!) Anyway, people did make a bit of a fuss about the retrospective-taxation aspect of the changes back then in 2007-8 when they were proposed and enacted, but they didn't get anywhere. So I'm pretty certain there's no mileage in pursuing that angle now. And as far as the shock you've received is concerned, you might be able to reduce it by looking at what your CGT bill would have been if you did still have the indexation to reduce the gains up to 1998, but had to pay CGT at your marginal Income Tax rate rather than at the 10%/20% rates. No guarantees, though: as I indicate above, that exercise produces widely varying results for different individuals. (*) There is a case in which indexation can still affect calculations of capital gains and losses - IIRC it's when an asset was transferred between spouses before the simplifications came into effect: the indexation got 'frozen' into the transferee spouse's base cost at the time of the transfer, and that doesn't get retrospectively reversed. (But if this situation does apply to anyone, just take it as an indication that you need to check the exact rules, because I am not certain I remember the treatment accurately!) Gengulphus
stasper: Orchestralis, thank you very much for your suggestion. I will ask Interactive Brokers, but I don't expect much from them. They have lots of info about US tax on their site, but not about UK CGT. But if anyone here has a margin account with them and has faced the problem before, please share your experience. The following site hxxps:// provides an application that claims it can handle CGT for foreign stocks, including currency variations, but you have to open a pro trading account with them at a steady cost of 50 GBP per month just to get access at the calculator... and I am not sure it can handle margin accounts, so this is out of the question. On the other hand, calculators like CGTcalculator can handle the stock disposal part if you feed them with the acquisition and disposal prices in GBP (doing the conversion yourself using the prevailing exchange rates at the time of acquisition and disposal), but can't handle the currency acquisition and disposal part, as far as I can see. If anyone knows of an appropriate calculator that can do the job, they are most welcome.
gengulphus: Gooner1886, Whats percentage of cgt on trading account ? 10% The standard CGT rate on gains exceeding the CGT allowance is: * 10% on a first slice of them, that slice being the amount of your basic-rate Income Tax band that you haven't used against your income. * 20% on the rest of them. Those rates apply to most assets, including shares and other securities whether or not they're held in a trading account. The exceptions are (a) that CGT doesn't apply at all to assets that are exempt from CGT, such as those held in ISAs and SIPPs and most 'chattels'; (b) residential property, which is taxed at rates 8 percentage points higher, i.e. 18% and 28% in place of 10% and 20% respectively in the above. So assuming tax-exempt assets and residential property are not involved: * In the case that you're a higher-rate or additional-rate taxpayer as far as Income Tax is concerned, you've clearly used your entire basic-rate band against income, and so the answer that applies to you is 20%. * In the case that you're a basic-rate taxpayer as far as Income Tax is concerned, you've also certainly got some unused basic-rate band left, and so the answer that applies to you is 10% for some or all of your taxable gains, 20% for the rest (if any). Just how much gets 10% depends on how close you are to the higher-rate threshold: little if you're close to it, lots if you're a long way below it. * In the case that you're a non-taxpayer as far as Income Tax is concerned, the answer that applies to you is 10% for gains up to the your basic-rate band, 20% for any further gains beyond that. Gengulphus
gengulphus: Erogenous Jones, I'm sorry, but I think I have to largely pass on your question, because discretionary trusts and their taxation go well beyond my knowledge and experience. About all I can say is that if the rules for capital losses are the same as they are for individuals (which seems reasonably likely to me, but it's not something I know for a fact), then: * Gains and losses only arise (or are 'realised' in taxspeak) for CGT purposes if and when the assets are disposed of (usually by sale). So the trustees are to a large extent in control of which gains and losses arise for CGT purposes - they can prevent excessive gains or unneeded losses from arising by choosing not to sell, or cause losses needed to offset excessive gains (or enough gains to use the CGT allowance) to arise by choosing to sell. There are of course other forms of disposal that the trustees don't have a choice about, such as having a shareholding taken over or having made a fixed-term investment that matures, so they won't necessarily be able to totally control which gains and losses arise for CGT purposes - but they will generally have quite a lot of control. * When considering selling for the CGT effects, do pay attention to the old maxim that one shouldn't let the tax tail wag the investment dog - if there's a clear investment case for selling, do sell, and if there's a clear investment case for holding, don't sell, in both cases even if that means that the trust pays more CGT. But if the investment case is unclear, using the CGT effects as a tiebreaker between selling and not selling can be a reasonable idea. * Also watch out about trading costs: at 1%ish, they may seem small compared with 20% CGT, but they're a percentage of the total capital and the CGT is a percentage of the gain or loss - so if e.g. an investment is standing at a 5% loss, selling to save CGT by offsetting the loss is likely to cost about as much as it saves... * Once a loss has arisen by the asset being disposed of, one needs to tell HMRC about it (known as 'claiming' the loss) within 4 years after the end of the tax year in which it arose if one is ever to use it to offset gains. It also has to be used to offset gains that arose in the same tax year to the extent that there are such gains, even if those gains fall within the CGT allowance. Losses that arise in a tax year and are in excess of gains that arose in the same tax year can be carried forward to be used in later tax years, provided HMRC are told about them within the 4-year time limit. Note that once HMRC have been told about such a loss, it gets carried forward until it's needed because gains exceed the CGT allowance (unlike same-year losses, brought-forward losses do not have to be offset against gains below the CGT allowance), with no time limit on how long it might take. As some examples: A) Suppose that the trust realised a loss of £1,000 and no gains in the 2015/2016 tax year, and that the trust hasn't realised gains in excess of the CGT allowance since then. That loss can be carried forward through all of those tax years and will continue to be available into the future, provided HMRC are told about it (with details - i.e. what was sold, when, how much it was sold for and how much it had cost, etc) by the deadline, which is April 5th this year (four years after the end of the 2015/2016 tax year). B) Suppose that the trust realised a loss of £1,000 and a gain of £500 in the 2015/2016 tax year, and that the trust hasn't realised gains in excess of the CGT allowance since then. The first £500 of that loss has to be offset against the gain, but the remaining £500 can be carried forward through all of those tax years and will continue to be available into the future, provided HMRC are told about it (with details - i.e. what was sold, when, how much it was sold for and how much it had cost, similar details of the gain it was partially offset against, etc) by the same deadline. C) Suppose that the trust realised a loss of £1,000 and a gain of £1,500 in the 2015/2016 tax year, and that the trust hasn't realised gains in excess of the CGT allowance since then. That loss has to be offset entirely against the gain and none of it can be carried forward, and (AFAIAA) the difference between having £1,500 net gains and £500 net gains in the 2015/2016 tax year makes no difference to the fact that no CGT was payable for that tax year. So while the trustees could provide details to 'claim' the loss, there would be no point in doing so (and if the trust tax return is like the individual one, the question it asks is whether one wants to claim losses, so one can truthfully answer it "No" in such circumstances). I should end this reply (which seems to have grown longer than I anticipated!) by again stressing the fact that it's based on my knowledge of CGT as it applies to individuals, and is only relevant to CGT as it applies to trusts to the extent that the rules are the same. Whether they are the same is something I'll have to leave to you or others to determine. Gengulphus
gengulphus: eeza, My understanding is that CGT totally ignores CGT-exempt assets, so I think your total sales should only count the CGT-chargeable gold coins. I don't know exactly what "registered for Self Assessment" means or how long such registration lasts for, but my understanding of your obligations is based on It is that: * if HMRC ask you to fill in and submit a tax return for a tax year, you're obliged to do so and to follow its instructions in doing so - those instructions include having to fill in the capital gains part if the total for which you have sold (non-CGT-exempt, I believe) assets is over four times the allowance; * if HMRC don't ask you to fill in and submit a tax return for a tax year, you're obliged to work out whether you have Income Tax to pay in excess of what has already been deducted at source, and whether you have CGT to pay, and to notify HMRC if you have either (and I would expect HMRC to often respond to receiving such a notification by asking the taxpayer to fill in and submit a tax return, changing it into the first situation). As far as I am aware, this obligation does not involve a check on the value of the assets you have disposed of, only on the gains you have made (*). So on the assumption that HMRC haven't asked you to fill in and submit a tax return, it doesn't sound to me as though you need to do anything about CGT. And even if they have asked you to fill in and submit a tax return, or if they do so in the future, it doesn't sound to me as though you need to say anything about CGT in it. Just to be clear, though, I'm not a tax professional or expert - I'm an informed layman on CGT with most of my experience of CGT being for shares. I have no experience of CGT on coins, etc. So I am a bit out of my depth here, and my understanding is based only on general principles - it could easily be wrong if (for example) there's a special rule somewhere that I haven't encountered... (*) Note that if your overall gains are made up of a mixture of individual gains and losses, you can only offset the losses against the gains if you have 'claimed' the losses - i.e. told HMRC about them, with details. This could just conceivably be an issue for your chargeable sales - e.g. if you bought two coins for £2.5k and £17k, and sold them for £15k and £5k respectively, you would have sold for £20k and made an overall gain of £500, but it would be made up of an individual gain of £12.5k and an individual loss of £12k, and you would have to let HMRC know about at least one of the loss (to 'claim' it) and the gain (if you left the loss 'unclaimed'). I don't think that sort of situation is at all likely with gold coins, as in your case, but it can easily happen with other types of asset such as shares - so I'm writing this footnote mainly as a warning to other readers! Gengulphus
gengulphus: attrader, I have a question about CGT tax bracket. I have a company where I receive all my income in dividends and I pay dividend tax rate. For CGT, would I be classified as Basic Rate payer or High rate payer since I don’t receive any salaried income ? I cannot really answer that question as it stands, because nobody is really classified as either a basic-rate taxpayer or a higher-rate taxpayer for CGT purposes. Rather, their taxable capital gains are taxed by CGT at either the lower rates of CGT (10%, or 18% for residential property) or the higher rates (20%, or 28% for residential property), as follows: 1) Work out the total of their taxable capital gains realised during the year. 2) Deduct allowable capital losses according to the rules for doing so: first deduct ones realised during the same year as far as possible (i.e. deduct all those losses if they're less than the gains, or an amount equal to the gains if they're greater). Then if the remaining gains are above the CGT allowance and there are losses brought forward from earlier years, deduct them until either they run out or the gains are reduced to the CGT allowance. (Any losses left undeducted at the end of this are carried forward to the next year.) 3) The remaining gains are the net taxable capital gains. They are taxed as follows: * First, an amount up to the CGT allowance is not taxed. * Second, if there are gains left after the first step (i.e. the net taxable capital gains were more than the CGT allowance), an amount up to the amount of the Income Tax basic-rate band that was not used for income in the Income Tax calculation is taxed at the lower rates. * Finally, if there are still gains left after the first two steps, they are taxed at the higher rates. So the simple case (which I would guess doesn't apply to you) is that if you're a higher-rate taxpayer (or above) as seen by Income Tax, i.e. if your Income Tax calculation takes you into higher-rate tax, it will have used your entire basic-rate band, there will be nothing left for the second step to use, and so none of your net taxable capital gains will be taxed at the lower rates. I.e. up to the CGT allowance will be untaxed, and anything over that is taxed at the higher rates. But if you're a basic-rate taxpayer as seen by Income Tax, i.e. if your Income Tax calculation takes you into basic-rate tax but not into higher-rate tax, you probably didn't use all of your basic-rate band in that calculation (not quite certainly because your taxable income might be exactly equal to the higher-rate threshold, taking you all the way through the basic-rate band but not quite into higher-rate tax). Up to the CGT allowance of net taxable capital gains is untaxed and up to your amount of unused basic-rate band is taxed at the lower rates, and anything not covered by those is taxed at the higher rates. Or if you're a non-taxpayer as seen by Income Tax, i.e. if your Income Tax calculation has all of your taxable income covered by your personal allowance and any other proper Income Tax allowances you happen to have (though see below about some 'allowances' introduced in recent years) and so doesn't take you into basic-rate tax, the same applies except that all of your basic-rate band is available, not just some of it. Note that unused allowances do not count as unused basic-rate band. In particular, unused Income Tax personal allowance is completely wasted and doesn't affect the CGT calculation, just as unused CGT allowance is completely wasted and does not affect the Income Tax calculation. So basically, it's the gains that are classified as being covered by the CGT allowance, taxed at the lower rates or taxed at the higher rates, and you could well end up having some taxed at each rate. So asking how you are classified is somewhat off-target... (*) A couple of other things to say: first, the Income Tax calculation does of course look at all your taxable income - salary, interest and dividends (unless received in an ISA or other tax shelter), pensions, etc. So the amount of salaried income you receive is not enough on its own to determine how much basic-rate band your Income Tax calculation leaves unused - and the dividends you receive do count towards taxable income. "Dividend tax" is not a different thing from Income Tax - it is Income Tax, just paid at a lower rate than for most taxable income. And secondly, the so-called 'dividend allowance' is not what I called a "proper Income Tax allowance" above, in that it doesn't prevent the dividend income it covers being counted against the tax bands: it is just an especially low tax rate of 0% that applies to the dividend income it covers. I.e. 'dividend allowance' is a rather poor description of it, since it's applied in a rather different way to the personal allowance and that different way does affect how the basic-rate band is used. And other "allowances" introduced in fairly recent years may need careful looking at to see whether something similar applies to them... (*) Note that this is little different from the situation with Income Tax - higher-rate taxpayers generally have part of their income taxed at basic rate and the rest at higher rate. So it is customary to take "higher-rate taxpayer" to mean someone in that situation, and there is a convention that one describes a taxpayer according to the highest rate of Income Tax that they pay. One could have a similar convention with regard to CGT, so that one describes someone as a "higher-rate CGT payer", a "lower-rate CGT payer" or a "CGT nonpayer" according to whether they pay CGT at the higher rates (possibly accompanied by also paying it at the lower rates), and if not, whether they pay it at the lower rates. But just as what rate of Income Tax taxpayer one is normally regarded as is an output from the Income Tax calculation, not an input to it, what rate of CGT taxpayer one is by that definition is an output from the CGT calculation, not an input to it. One needs to know all the inputs to the CGT calculation to determine it, not just the facts you give! Gengulphus
gengulphus: amalanchier3, Final para - do you not use the losses to reduce the gains to the tax free level and then carry the remaining losses forward? I.e, you do not lose the tax free benefit in the relevant tax year. That's the rule that applies to brought-forward losses - i.e. losses that have already been carried forward from one tax year to the next at least once. But quoting the final paragraph you refer to (it's quite a long way up now!), with the important words emboldened it says: "Not "can offset", by the way - once you realise losses or are treated as realising them, you must offset them against gains you've realised in the same tax year as far as possible, and if there are further losses after all the gains have been offset, you then must carry those losses forward into the next tax year. I.e. essentially, the decision you make about whether to make the negligible value claim is the last one you make that affects the result of the CGT calculations: everything after that is a matter of doing the CGT calculations correctly, not of changing what their result should be." I.e. it's about same-year losses rather than brought-forward losses, and the rule about them is as it states: they must be used against the gains realised in that tax as far as possible. In normal circumstances (*), that means that you only stop using them when there are no gains left, and so losses only start being carried forward when the losses you've realised in a tax year are in excess of the gains you've realised in the tax year, and only the excess losses start being carried forward, not all of them. And the CGT allowance is most certainly a "use it or lose it" allowance - it's basically the CGT equivalent of the Personal allowance for Income Tax. If you don't have enough income in a tax year to use your entire Personal allowance, the rest is wasted rather than saved up for use in future tax years; likewise if you don't have enough net capital gains in a tax year to use your entire CGT allowance, the rest is wasted rather than saved up for use in future tax years. But in that, "net capital gains in a tax year" means capital gains realised in the tax year minus capital losses realised in the same tax year. I think brought-forward capital losses are instead the equivalent of income losses from earlier years, but am very uncertain about that because I've never had such losses and I generally only delve into complex areas of taxation when I personally encounter them, or someone from close family or otherwise particularly close to me encounters them and asks for my help. So basically all I know about income losses is that a question on this year's tax return's additional information pages asks for "Earlier years’ losses – which can be set against certain other income in 2016–17" under the heading "Other income losses" and similar questions in earlier tax returns, plus a few quick mentions in newspaper articles I've read. The wording "certain other income" in that question is enough to make me pretty certain that it will be a complex area! The process is equivalent (or at least very nearly so - there might be an obscure case where it isn't that I've missed!) to first using same-year losses, then using the CGT allowance, then using brought-forward losses, with each step able to go down to zero gains left, and obliged to if it can, even if subsequent steps would get there anyway. (That applies in principle even to the third step, though obviously not in practice because there are no subsequent steps under the current CGT rules.) Any losses left over after the first and third steps are carried forward to the next tax year; any CGT allowance left over after the second step is wasted, which means that any same-year losses used in the first step for reductions of gains in the range from the CGT allowance down to zero are obligatorily used, but effectively wasted. It's actually expressed with the second and third steps swapped around, and using brought-forward losses only obligatory down to the CGT allowance, not all the way down to zero. I suspect the reason why it's expressed that way is historical. Specifically, the effective CGT rate that applies to any particular gain has at times in the past been specific to each particular gain, most notably for gains realised between 6 April 1998 to 5 April 2008, which got a taper relief that was determined by how long that specific asset had been owned for. The order was then to apply same-year losses to the individual gains (until there were no same-year losses or no gains left), then apply brought-forward losses to the individual gains (until there were no brought-forward losses left or the remaining gains were down to the CGT allowance), then apply the appropriate amount of taper relief to each individual gain (which was why losses had to be applied to individual gains - they had to be separately accounted for up to this point), then total the remaining gains and apply the CGT allowance to them. One consequence of that was that one could be forced to waste brought-forward losses offsetting gains that were outside the CGT allowance before taper relief, but reduced to within it by taper relief - which is why I say that in principle, offsetting brought-forward losses is obligatory even if subsequent steps would do the job anyway. Anyway, getting rid of the taper relief was done in the 6 April 2008 CGT rule changes, and led to a tremendous simplification in CGT reporting because individual gains could be totalled much earlier in the process rather than being separately accounted for up to and including applying taper relief, and another because it was no longer necessary to get an exact acquisition date for each realised gain. But the result of taking taper relief out of the previous computation order and reducing to computations on totals rather than on individual gains where possible is the current same-year losses / brought-forward losses / CGT allowance order, and that seems to have been as far as the simplification process went... (*) There is at least one case where a loss is only usable against certain types of gain, namely when you've realised a loss in a disposal to a 'connected person'. In that case, you can claim the loss, but it's only usable against gains realised by other disposals to the same 'connected person'. So such 'clogged losses' may end up being carried forward many times before (if ever) one realises a gain they can be used against, and are a reason why "as far as possible" is the strictly correct wording of the rule about using same-year losses, rather than "until there are no gains left". I don't know of any other CGT rules that say a loss can only be used against some types of gain - but only means I'm pretty certain that if there are such rules, they apply only in very unusual circumstances, not that there are no such rules... Gengulphus
ADVFN Advertorial
Your Recent History
Capital Ge..
Register now to watch these stocks streaming on the ADVFN Monitor.

Monitor lets you view up to 110 of your favourite stocks at once and is completely free to use.

By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions

P: V: D:20201027 13:55:35