The Lemon Fool

Seeking some clarification on how capital gains affect the personal allowance in 2023/24 £12,570

My scenario:

Retired with income from various sources, but none via employment.
One income stream is via disposal of shares acquired as part of a share purchase scheme with a former employer.

I've worked out how many shares I can sell to keep within the 2023/23 CGT allowance (£6K) on my gains.
My question is, would the capital gain affect my personal allowance if the capital gain is below the £6K CGT allowance ?
Or is it only the portion of the gain which exceeds the £6K allowance which would reduce the personal allowance ?

y0rkiebar wrote:Seeking some clarification on how capital gains affect the personal allowance in 2023/24 £12,570

My scenario:

Retired with income from various sources, but none via employment.
One income stream is via disposal of shares acquired as part of a share purchase scheme with a former employer.

I've worked out how many shares I can sell to keep within the 2023/23 CGT allowance (£6K) on my gains.
My question is, would the capital gain affect my personal allowance if the capital gain is below the £6K CGT allowance ?
Or is it only the portion of the gain which exceeds the £6K allowance which would reduce the personal allowance ?

You have more than one personal allowance. Capital gains only effect CGT and it's allowance, not the allowance upon income before tax or interest before tax.

I hope, obviously, you add all the capital gains that you have made in a year together to calculate CGT. So if you make £6k on a collection of share disposals and 50p on bitcoin, then you need to pay tax on the 50p.

I find it really irritating that I'm expected to track the gains/losses that I make when I spend bitcoin on a pint of beer, but them is the rules.

Urbandreamer wrote:
You have more than one personal allowance. Capital gains only effect CGT and it's allowance, not the allowance upon income before tax or interest before tax.

I hope, obviously, you add all the capital gains that you have made in a year together to calculate CGT. So if you make £6k on a collection of share disposals and 50p on bitcoin, then you need to pay tax on the 50p.

I find it really irritating that I'm expected to track the gains/losses that I make when I spend bitcoin on a pint of beer, but them is the rules.

Thanks, yes understand I have two allowances CGT alowance + personal allowance for general taxation.
And yes, I am summing up all capital gains and also using a loss to offset too.

I guess this HMRC link answers my question https://www.gov.uk/capital-gains-tax/rates

y0rkiebar wrote:Thanks, yes understand I have two allowances CGT alowance + personal allowance for general taxation.
And yes, I am summing up all capital gains and also using a loss to offset too.

I guess this HMRC link answers my question https://www.gov.uk/capital-gains-tax/rates

No, you have more than two personal allowances.

You have an allowance for Capital gains.
An allowance for income.
An allowance for interest, that changes dependent upon your income.
An allowance for dividends, again that changes dependent upon income.

There may be others as well.

For example there is an allowance before import duty is applied. Many know it as the "duty free" allowance. It's personal, rather than allowed to a group or "company".
Likewise you are allowed to make your own beer or wine, as long as you don't sell it.
The family home "principle residence" is exempt from CGT, but not the holiday home.

There use to be a government slogan "Tax shouldn't be taxing".
HA!

They have an "Office of tax simplification".
HA!

Apart from main personal allowance, all the others have been squeezed away. Capital gains from 12000ish to 3000, dividends from 5000 to 500. They seem to be added for political reasons as sugar pills to cover policies intended long term to increase taxationm but at the corners of tax policy. Only the headline personal allowance tends to rise.

JohnB wrote:Apart from main personal allowance, all the others have been squeezed away. Capital gains from 12000ish to 3000, dividends from 5000 to 500. They seem to be added for political reasons as sugar pills to cover policies intended long term to increase taxationm but at the corners of tax policy. Only the headline personal allowance tends to rise.

My response would be off topic for this board, but that subject is worth discussion.
Hence I have started a thread on the Economy board.
viewtopic.php?p=610564#p610564