Capital Gains Tax

29/01/2018 15:00:43
Viewing my HMRC calculation sheet, my income apart from CGT is £10,291.00
My bank interest is £482.00 so the calculation states Nil rate so tax liability is £0.00
I agree with these figures but when the CGT calculation is done it adds the bank interest to the £10,291 to give a figure of £10,773.00
I cannot find anywhere on the www.gov.uk site where it is stated that the bank interest becomes taxable interest when there is a CGT liability?
An explanation would be appreciated - thanks.

Capital Gains Tax

29/01/2018 15:19:43
Hi Tel

Bank interest received is added to your income to give your total income for the year.

We would need to view your calculation to ensure it is correct. If you want us to check you can request a webchat through HMRC website by accessing the following link https://www.gov.uk/government/organisations/hm-revenue-customs/contact/self-assessment

Re:Capital Gains Tax

29/01/2018 19:00:39
Well yes my bank interest is 'income' but the calculation has already designated it as 'nil rate' because of the Personal Savings Allowance so why should it be included inthe figure 'Total income on which tax has been charged' when the CGT tax is calculated if it is income that is 'nil rated'?

The calculation for my CGT tax liability is correct if the bank interest should be included but I can't find any document on .gov.uk site to say that it should be.

I accept that HMRC has decided that the bank interest should be included and the calculation sheet does reflect that. I am questioning HMRC interpretation of the government's intention on how the Personal Savings Allowance should be implemented.

I have already spoken to the helpdesk who asked me to submit the calculation by email to helpdesk@notifications.hmrc.gov.uk which I did but after 10 days I had a phone call at home from someone in the 'digital team' who told me that they could only advise me to phone the helpdesk........which is where I started.

Re:Capital Gains Tax

30/01/2018 13:31:10
Hi Tel
I’ve done a dummy calculation and as you can see ‘Total Income on which tax is charged’ is £0.00. The CGT calculation comes after this so the bank interest has no reflection on the CGT calculation either way based on the small amounts you give. If you was bordering higher rate than the CGT calculation may be affected. .
This section provides you with a breakdown of your full calculation. If it says your tax return is 100% complete then you have submitted your return and this is a copy of the information held on your official online Self Assessment tax account with HM Revenue and Customs.
Pay from employments £10,291.00
Interest from UK banks, building societies and securities etc £482.00
Total income received £10,773.00
minus Personal Allowance £11,000.00
Total income £0.00
How we have worked out your income tax
Amount Percentage Total
Starting rate £0.00 x 0% £0.00
Nil rate £0.00 x 0% £0.00
Total income on which tax has been charged £0.00
Income Tax due £0.00

plus Capital Gains Tax
Taxable Capital Gain £18,900.00
Other gains basic rate £18,900.00 x 10% £1,890.00
Capital Gains Tax due £1,890.00

Income and Capital Gains Tax due £1,890.00


Re:Capital Gains Tax

31/01/2018 11:24:13
Thanks for your reply but you say this: "The CGT calculation comes after this so the bank interest has no reflection on the CGT calculation"

You also say this:"Total income received £10,773.00 " so the bank interest of £482.00 does have an effect because it has been added to the Total Income on which tax is due i.e. £10,291.00

My point is that the figure of £10,773.00 is then used to calculate tax due under CGT rules when I think the figure should be £10,291.00 to reflect the fact that the £482.00 is my Personal Savings Allowance and nil rated for tax purposes.

My Taxable Capital Gain is £48,463.00 so subtracting £10,773.00 from £32,000 results in £21,227.00 taxed at 18% but subtracting £10,291.00 from £32,000 results in £21,709.00

The figure of £10,773.00 has used up more of the amount taxed at 18% so a greater amount is taxed at 28%
This makes a difference of £48.20 more CGT due.