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Posted 10 months ago by keith7819
I just want to know if this would take me out of the 0% tax band with the following example Salary £12k Disposals of shares = £25k Capital Gains = £500 Thanks
Posted 10 months ago by HMRC Admin 5 Response
Hi

You cannot use any balance of your personal allowance against capital gains. on your example your gain would be liable at 10% on £19000 - you would be due the annual exempt amount of £6000 for capital gains 23/24 - Capital Gains Tax: what you pay it on, rates and allowances

Thank you
Posted 10 months ago by keith7819
Sorry I was getting confused about capital gains and personal allowance which I now understand are taxed differently The gain is only 500 pounds (not 25k) and as I now understood it, you are only taxed on your gains above the annual allowance (not the whole amount that you receive. If I bought shares for £24.5k and then sold them for £25k making only a £500 profit. That £500 gain would be within the annual exempt amount of £6000 so no cgt tax is required. The original amount you invested is not taxable when you get it back, only the profit is. So If I bought shares for £1 million and then later sold them for £1,000,500. Then it is the same scenario as above If my salary was 12k then I would be in the 0% tax band. If I sold any amount of shares then they would be subject to cgt not income tax so the tax band would remain unaffected. That is how i understand it. Please let me know if you think otherwise
Posted 10 months ago by HMRC Admin 25 Response
Hi Keith7819,
You are correct.
Please note though, disposal proceeds of more than £50,000 need to be reported even when the gain is below the annual exempt amount.
For 24/25 the annual exempt amount is reduced to £3000.
Thank you. 
Posted 10 months ago by keith7819
Perfect. Thanks. The disposals proceeds will be under £50000 and the gains will also be under £6000 for this tax year so we will have nothing to report

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