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bigduckontax
bigduckontax, Accountant
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If I decide to sell some shares from a non-ISA holding and

Resolved Question:

Hello,
If I decide to sell some shares from a non-ISA holding and make a capital gain, I realise that I will be taxed on the gain for the amount above the annual allowance. However, is this gain classed as Other Income (above the £300 allowance) that should be declared for my Tax Credits claim ? I do already declare any dividend income from this non-ISA holding. I work part time self-employed due to caring for a disabled child and receive both Working & Child tax credits.
Thanks
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

Here is the advice from the notes to the Tax Credit form:

'We will not normally take capital into account when we work out
your tax credits. By capital we mean deposits in current and savings
accounts at banks and building societies, many lump sum payments,
the value of property, shares and other investments.'

This capital gain need not been declared on your claim form.

I do hope that you have found my reply of assistance.

Customer: replied 1 year ago.
Hi Keith,
The notes from the tax credit form seem ok to exclude the "capital" whilst holding them, but do not mention the "gain" should I profit when disposing of them ?
I need to be 100% sure as I am considering the sale of a fairly large share holding that will result in a profit.
Regards
Dave
Expert:  bigduckontax replied 1 year ago.

The gain is still part of capital when realised and does not form part of your income for either Income Tax nor Tax Credits. My advice to you would be not to include it when you fill in your form.

Customer: replied 1 year ago.
basically the Gain is an increase in value of the Holding, rather than an Income from it, in terms of Tax Credits. As long as I declare the Gain in Self Assessment as the increase in Capital when released (sold), I will be ok?
Expert:  bigduckontax replied 1 year ago.

Correct, your savings base has merely been increased. However, had you been granted bonus shares for example, that does count as income for tax credit purposes. The gain must be declared in your annual self assessment tax return in the usual way and any aggregate gains over the Annual Exempt Amount (AEA), currently 11.1K, taxed at 10% or 20% [16/17 tax year] depending on your income including the gain in the tax year of disposal.

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Customer: replied 1 year ago.
Brilliant, you have answered my question in full and given me confidence, very thorough :-)
Expert:  bigduckontax replied 1 year ago.

Delighted to have been of assistance.

Please be so kind as to rate me before you leave the Just Answer site.

Expert:  bigduckontax replied 1 year ago.

Thank you for your support.

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