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Sam, Accountant
Category: Tax
Satisfied Customers: 14195
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I have question born of idle curiousity rather than urgency

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Hi there,
I have question born of idle curiousity rather than urgency and so other people's questions should take precedent before mine. However, theoretically, if someone was unemployed in the UK - and therefore not pay any income tax - yet for instance somehow someway gain £100,000 on the stock market, how would their tax work out? Is there some sort of special condition for this? Would they be regarded as self-employed perhaps and pay the higher rate? Or would the person simply pay 10% capital gains tax upto £32,000 via lower band income tax, and then having deducted £11,100 using their tax free allowance, pay 20% capital gains on the remaining £56,900?
Thanks a lot!


Thanks for your question

Is this through the actual investing on shares and selling at a later date and making a gain or specifically forex trading.

If the former then the first £11,100 would be tax free under the capital gain rules, then the next £32000 at 18% and then the remaining gain at 28%

If forex trading then no tax liability at all as deemed to be gambling (forecasting) unless you were making this money by other peoples money in which it would then be classed as a self employment trade - and then the first £11,000 would be tax free, then the next £32000 at 20% and the remaining amount at 40%

Let me know if I can assist further



Customer: replied 1 year ago.
Thanks Sam, that makes a lot of sense.Just one more thing to get this exact however. There are new capital gains tax rules from April 6th 2016 onwards. From what I am reading, a capital gains tax at 18% on the £32,000 via lower band would ONLY be if someone were disposing of residential property, while a remaining gain charged at 28% would also only be charged at 28% if it was residential property a person was disposing of. Instead of this then, if someone was selling only shares for their gain, the respective lower band capital gains tax from what I'm reading would be 10% of the gains upto £32,000 and then 20% on the remaining gain above this. Am I reading this right? again Sam.


Thanks for your response

Yes you are right but I assumed (wrongly) you were talking about a gain already realised - is this not the case?

That not being the case - that you are referring to a gain post 6th April then your capital gain position is first £11,100 tax free then any unused basic rate and will allow that element of gain at 10% and any remaining gain just at 20%



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Customer: replied 1 year ago.
Ahhh I see, that's perfect Sam, thanks for your help. Top marks!