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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 outyour tax credits. By capital we mean deposits in current and savingsaccounts 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.
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.
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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