How will paying into a pension reduce CGT?

Hi All, Just seeking advice on CGT calculation and if it's possible to offer the amount by paying into a pension? I will give a hypothetical example if that helps: Salary 30,000 Dividends 20,000 Sell Business for 500,000 CGT @ 20% = 100,000 (Business not over 2 years old) All I want to know is, if I put 50,000 into my private/work pension, how will this lower my CGT? What relief do I get, will this put my CGT back into the 10% bracket of the remaining 450,000? How does it work exactly?

Hi ,
 

This forum is for general queries only and is intended to help you self-serve. We are unable to provide specific advice tailored to individual circumstances. Plase see guidance at : Capital Gains Tax: what you pay it on, rates and allowances   . Thank you .

Not HMRC...if you put £50k in pension this is more than your earnings...therefore you cant get tax relief on excess...i.e. not on more than £30k earned income (dividends are not earned income)...and would end up with a tax charge. The max is £30k on £30k earnings. Your dividends after small allowance would use personal allowance/savings rate as appropriate and balance would be taxable at 8.75%. The balance of the basic rate band up to £37700 would be available for CGT at 10%, the balance above this however would remain at 20%. If you action £50k this is very tax inefficient.