Home Forums Capital Gain on BTL and Shares

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  • Claire Harper
    Participant
    Post count: 15

    Hi Gary

    Think I can answer this. There is an order in which CGT gains are stacked on the taxable income. Working from bottom up…..qualifying gains, non qualifying gains and lastly property. So in answer to your question, the shares fall into non qualifying gains and that gain is added on top of the taxable income before any gains on property.

    Hope this makes sense!

    Tessa Roberts
    Participant
    Post count: 2046

    It’s a bit of an odd one this – the line from HMRC is that you can do either way – also, often, when you do the maths, the tax bill is the same either way round!

    Tessa.

    Tutor for Expert Pensions.

    Julie Stewart
    Participant
    Post count: 155

    This is great to know as I was automatically applying the BRT to the property gain.

    If anything gained from these studies, it’s the lack of clarity in the regulations in our industry at times 😫 If we struggle, is it any wonder that clients are put off by the complexity!

    Julie.

    Julie Stewart
    Participant
    Post count: 155

    Looking at the April 19 paper, the basic rate band is applied to the property first…

    Tessa Roberts
    Participant
    Post count: 2046

    And in Oct 17 too. (Although HMRC do state you can do either, but I think, for exam purposes, we’d best do it the CII way!)

    Tessa.

    Tutor for Expert Pensions.

    Tessa Roberts
    Participant
    Post count: 2046

    And in Oct 17 too. (Although HMRC do state you can do either, but I think, for exam purposes, we’d best do it the CII way!)

    Tessa.

    Tutor for Expert Pensions.

    Gary Youssef
    Participant
    Post count: 31

    but we would apply the ER gain first to the BRT band at 10% and then the BTL gain?

    Tessa Roberts
    Participant
    Post count: 2046

    Yes. Entrepreneurs’ always first.

    Tessa.

    Tutor for Expert Pensions.

    Gary Youssef
    Participant
    Post count: 31

    Hi Tessa
    If there is a capital gain on a BTL and on a share pool, I know you can take the AEA off the BTL gain as that suffers the highest tax at 18/%/28%, but when applying the basic and higher rate tax bands, can you choose to apply the BRT band to the BTL first so that this gain suffers just !8% CGT rather than 28%. The gain on the share pool if used first is large enough to push the BTL gain into the HRT band and therefore suffer 28% tax. The answer from the Oct2017 exam paper suggests you have to apply the BRT tax band to the share pool first so that the BTL gain would suffer the HRT of 28%.

    G

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