CGT / Income swap across tax years
Posted: January 10th, 2019, 10:58 am
odd question but would appreciate feedback and provoke discussion
The better half has triggered a large property CGT bill in 17/18 that will need to be paid in several months (or mitigated in 17/18) BUT she effectively has zero annual income and little next tax year also
so here's a thought
1) Can I find a low spread high yield investment that could be bought now cum div i.e. 17/18, which goes ex div in 17/18 but pays the actual divi in 18/19 - the investment would be sold in say late March upon ex div to trigger an expected CGT loss
2) The CGT tax saving on the loss would be at the full marginal rate which is worth having to offset the real estate gain
3) The problem I see are threefold
a) My CGT tax knowledge is "pants" and hence my logic/thinking may be wrong
b) There are no obvious high enough yield investments that make the "hill worth the climb" vs the risks e.g. buy/sell spreads/economy crash
c) There may be better/easier ways to flip/reduce the gain (I ain't no tax or investment expert but willing to research)
I have dabbled in bank bonds over the years and the likes of NWBD/SAN would work but b) kicks in. Alternatively something like Co-op 42TF might have been interesting (large divi and larger ex div) but the boat sailed on that one in December 2018 if my understanding is correct
thanks for any thoughts - its an interesting position to be actually looking for CGT losses
Z71
The better half has triggered a large property CGT bill in 17/18 that will need to be paid in several months (or mitigated in 17/18) BUT she effectively has zero annual income and little next tax year also
so here's a thought
1) Can I find a low spread high yield investment that could be bought now cum div i.e. 17/18, which goes ex div in 17/18 but pays the actual divi in 18/19 - the investment would be sold in say late March upon ex div to trigger an expected CGT loss
2) The CGT tax saving on the loss would be at the full marginal rate which is worth having to offset the real estate gain
3) The problem I see are threefold
a) My CGT tax knowledge is "pants" and hence my logic/thinking may be wrong
b) There are no obvious high enough yield investments that make the "hill worth the climb" vs the risks e.g. buy/sell spreads/economy crash
c) There may be better/easier ways to flip/reduce the gain (I ain't no tax or investment expert but willing to research)
I have dabbled in bank bonds over the years and the likes of NWBD/SAN would work but b) kicks in. Alternatively something like Co-op 42TF might have been interesting (large divi and larger ex div) but the boat sailed on that one in December 2018 if my understanding is correct
thanks for any thoughts - its an interesting position to be actually looking for CGT losses
Z71