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Posted Thu, 24 Nov 2022 19:11:20 GMT by Gary Coombs
Looking at HMRC guidance on reporting CGT for residential property it is clear that the CGT rate is 18% if taxable income plus net gain is less than £37,700. However, what I cannot find is how one calculates taxable income mid-year given that the gain has to be reported within 60 days. This is because some types of income like interest will not be known until the end of the tax year in question. Example: Pension income known for the tax year in question, say £30,000 Rental profit to completion of sale in July £? but can be calculated within the 60 days, say £3,000 Non-ISA Interest income £? - no idea what it will be for the year but known to July completion date, say £2,000 Other variable income sources like dividends etc - same issues as interest (ignore for now) Net taxable gain £16,000 At completion, known taxable income is £35,000. Personal Allowance and Personal Savings Allowance total £13,570. This means a Gain of £16,000 would be fully taxable at 18% but if, by the end of the year, the variable taxable income (interest and other) is, say, £6,000, some of the gain would be chargeable at 28%. How does one proceed when reporting the gain?
Posted Fri, 25 Nov 2022 15:17:57 GMT by HMRC Admin 10
You will have to make a realistic estimate based on the income already received in the tax year and what you still expect to receive.
This will allow you to submit the details within the deadline.
You can then amend at the end of the tax year or, if you already complete a self assessment tax return, you will be declaring the gain in your return which will have the actual details and the tax due on the gain would be adjusted accordingly.

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