and welcome to the site. Thank you question.Please advise what figure is shown as chargeable gain.Many thanks
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Thank you so far. I should like to take a little time what you have said and I will not be able to do this until tomorrow. I will then get back to you either to confirm I am satisfied and no further requirement from you - or to ask question. Is this ok.?
In your full reply you say "The gain carries a notional tax credit at basic rate. Individuals are treated as having paid income tax at basic rate ona chargeable event gain". Can you explain what this means in 'layman' words. Wait to hear from - but thanks already help you are giving me.
Richard, thanks reply.Basically, it means that if the taxpayer is not liable to income tax on his total income at any rate above the basic rate, he will thus pay no tax on the chargeable event gain as it has been accounted the investment company at the basic rate.It is like the tax credit on dividends paid to individuals. So long your total income stays within basic rate band you don't pay any tax on dividends paid to you.I hope it is helpful.
Thanks very much. Just one further question which I hope is not asking too much of you. My gross income current tax year ending 5 April 2015 will be £35484 - made up by an Occupational Pension of £29276 and State Retirement Pension of £6208. My PAYE Coding Notice shows my Personal Allowance as £10000. HM say in the Coding Notice " We think the amount of State Pension or other taxable State benefits you will receive this year is £6208. The State Pension or State benefit is taxable so we have used £6208 of your tax-free allowance because the Department and Pensions cannot take tax off you payments". My Pension Scheme use my tax code 379L to work out how much tax to deduct. Given this information could you give me an indication of how much I could take out of my Investment Plan before being liable to pay tax - my understanding now being that no tax payable until I move from the basic tax rate to the higher rate.
Thank you again help.
Richard, thank you reply.You will not have to pay any tax on the chargeable event gain if your total income inclusive of the gain is less than £41,865 in the current tax year.So you could take £6,381 as chargeable event gain(41,865-35,484) before you go into higher rate band.I hope this is helpful.
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