Capital Gains Tax for non tax payer

del mar 2

Member
Messages
212
Afternoon,

Somebody here will know this !!

Ex wife doesnt work but has sold a property and will have CGT to pay.
CGT allowance is £12,300
CGT on properties appears to be 18% as a Basic Rate tax payer.

If you have not used your own income tax allowance can you use this aswell, or would any gain she has made by taxed at 18%, after the £12,300 allowance.

Thank you
 

dem maser

Moderator
Messages
34,221
Someone will know better than myself but my understanding is if you have not used your allowance then you can add it aswel
 

Scaf

Member
Messages
6,512
Someone will give the definitive, but that’s my understanding.

My wife is in similar position as she holds our rentals and we looked at selling one last year.
 

dgmx5

Member
Messages
1,142
I think the key point here is that she is your ex-wife so no married couple exemption available to her, at least from yourself.
 

Scaf

Member
Messages
6,512
A bit of a thread hijack but on a similar topic.

My wife did her tax return last night, her only income is the rental from ”her” properties.
Tax payable was calculated and is therefore due, but they are also asking for 50% of next years tax bill “upfront” !

Never had this before, always pays tax as calculated and on time.
 

doodlebug

Member
Messages
913
A bit of a thread hijack but on a similar topic.

My wife did her tax return last night, her only income is the rental from ”her” properties.
Tax payable was calculated and is therefore due, but they are also asking for 50% of next years tax bill “upfront” !

Never had this before, always pays tax as calculated and on time.
The Inland Revenue did that to me about 5 years ago when I had a fairly big one-off dividend from a wedge of shares I own. I had to spend an hour or so on the phone trying to explain to them that it was a one-off dividend and I would not receive a repeat payment in the future. Eventually they accepted my explanation and removed the demand for 50% of next year's tax bill but they warned me that if I did get another large payment the next year I would not only be liable for the tax on said payment but I would also have to pay a fine for late payment!

WTF?

Robbing barstewards.
 

CatmanV2

Member
Messages
48,549
A bit of a thread hijack but on a similar topic.

My wife did her tax return last night, her only income is the rental from ”her” properties.
Tax payable was calculated and is therefore due, but they are also asking for 50% of next years tax bill “upfront” !

Never had this before, always pays tax as calculated and on time.

I'd tell them to stuff it. It's worked for me so far. They decided I owed them £3k additional tax *this* year in December. We agreed that their algorithm was having a bad day and I'd sort it out next Jan.....

Still £350 worse off per month for the rest of this year, though.

C
 

RoaryRati

Member
Messages
1,582
A bit of a thread hijack but on a similar topic.

My wife did her tax return last night, her only income is the rental from ”her” properties.
Tax payable was calculated and is therefore due, but they are also asking for 50% of next years tax bill “upfront” !

Never had this before, always pays tax as calculated and on time.
They like to do that - it makes it all a nightmare. And from what I've heard (tho' not in the press) they are halving the CGT allowance to around £6.5k - I guess from the new tax year.
 

Phil the Brit

Member
Messages
1,499
I believe the specific figure they use is £1000. When you own more than that for this year they charge you 50% for next year. Under £1000 and you don't pay it now.
 

Sam McGoo

Member
Messages
1,746
I believe the specific figure they use is £1000. When you own more than that for this year they charge you 50% for next year. Under £1000 and you don't pay it now.

Na, its 20%. If you underpay tax by 20% you'll get asked for payment on account.
It's happened to me quite a lot the last few years. Even though I'm PAYE, but due to having a couple of rentals and the stupid way my company calculate tax owed, my P60 never reflects my true earnings and I have to sort it out myself.

I've avoided it the last couple of years. In March I work out what I really owe from what I earned (can do this with a simple tax calculator) and making a payment to my self assessment account putting myself in credit by the difference.

Then, in the summer when I fill out the self assessment, it all cancels each other out.

Basically, they're trying to claw back the intrest they're missing out on for the months they've been waiting for you to submit your tax return and under paid.
 

CatmanV2

Member
Messages
48,549
Na, its 20%. If you underpay tax by 20% you'll get asked for payment on account.

That seems far more likely than £1000. Given I've just paid more than that for 21-22 (bonuses, redundancies and moving jobs) and no payment on account for this year (although I will almost certainly owe additional tax. (and I'm PAYE)

C
 

Felonious Crud

Administrator
Staff member
Messages
21,013
My return submitted today has a payment on account for the following (22-23) tax year added to the amount due. As it'll be the first time I'll have paid any personal taxes since last year it seems reasonable.
 

Scaf

Member
Messages
6,512
I'd tell them to stuff it. It's worked for me so far. They decided I owed them £3k additional tax *this* year in December. We agreed that their algorithm was having a bad day and I'd sort it out next Jan.....

Still £350 worse off per month for the rest of this year, though.

C
I think we will try to resist it, probably by telling them we are selling the properties