Which is principal and which is capital gain?
Discussion
Musing about retirement - which is a long way off - I’m just wondering how my general investment account will be taxed.. When I do return to the U.K., my cash will come with me and we start ‘afresh’ with U.K. tax. No SIPPs, no ISAs, just a lump of my hard-earned…
Let’s use round numbers for ease - i plonk it all in VLS100 general investment account.. It’s a 1m pot which has increased 30k and I sell down 30k to live on… let’s say it’s my only capital gain and I have no other income.
Is that 30k immediately classified as gain, so 12.3k CGT allowance applied and the remaining 17.7 taxed at CGT rate?
Is 3% of it CGT given the annual gain?
Do I apportion and declare some of it (up to the allowance, naturally) as CG and the rest as principle?
I’m just trying to work out loosely what the scope is for selling down a general investment equity account in the most suitable way and see if I need to start transferring assets to my wife so we can double up on CGT allowances etc (she’s American so it has to be done over time..)
I’m aware that there will be ISAs and other vehicles along the way, but I’m purely interested in what my tax situation will be regarding the above from a general account.
Thanks all. As usual, saving the money is only half the battle!
Let’s use round numbers for ease - i plonk it all in VLS100 general investment account.. It’s a 1m pot which has increased 30k and I sell down 30k to live on… let’s say it’s my only capital gain and I have no other income.
Is that 30k immediately classified as gain, so 12.3k CGT allowance applied and the remaining 17.7 taxed at CGT rate?
Is 3% of it CGT given the annual gain?
Do I apportion and declare some of it (up to the allowance, naturally) as CG and the rest as principle?
I’m just trying to work out loosely what the scope is for selling down a general investment equity account in the most suitable way and see if I need to start transferring assets to my wife so we can double up on CGT allowances etc (she’s American so it has to be done over time..)
I’m aware that there will be ISAs and other vehicles along the way, but I’m purely interested in what my tax situation will be regarding the above from a general account.
Thanks all. As usual, saving the money is only half the battle!
Edited by Royal Jelly on Sunday 29th August 06:12
Thank you, CD. Makes sense.
So (and forgive my ignorance, please), to prudently take advantage of my CGT allowance in my example, I’d need to sell (give or take) 350k - fill ISAs, bank my living fish, wait 30 days and bundle the remaining 280ish K back in, rinse & repeat?
Appreciate your response. I’m pretty diligent with saving by this far I’ve just taken the approach of ‘save & invest’ without giving much thought to the structure of my retirement spending..
So (and forgive my ignorance, please), to prudently take advantage of my CGT allowance in my example, I’d need to sell (give or take) 350k - fill ISAs, bank my living fish, wait 30 days and bundle the remaining 280ish K back in, rinse & repeat?
Appreciate your response. I’m pretty diligent with saving by this far I’ve just taken the approach of ‘save & invest’ without giving much thought to the structure of my retirement spending..
t, CD did tell me about this” when I sell too late in March. I asked a very similar question last week. There’s some calculations a bit later on. Might be helpful
https://www.pistonheads.com/gassing/topic.asp?h=0&...
https://www.pistonheads.com/gassing/topic.asp?h=0&...
Have your investments been cost basis adjusted for reinvested monies that may have been already taxed. like dividends or possibly Cap gains depending on your current tax jurisdiction.
Don't frig about selling stuff each Month. Liquidate 100K before you enter UK, that will give you three years of draw down with no tax liability.
Then top up this cash position at your leisure using CGs or divs when appropriate.
Depending on where you are now it might also make sense to re-establish your cost basis by selective selling and buying.
Example in the US long term cap gains are rated at 0 if you can get your AGI below 80K (Adjusted gross income) for the moderately rich that's not too difficult.
Don't frig about selling stuff each Month. Liquidate 100K before you enter UK, that will give you three years of draw down with no tax liability.
Then top up this cash position at your leisure using CGs or divs when appropriate.
Depending on where you are now it might also make sense to re-establish your cost basis by selective selling and buying.
Example in the US long term cap gains are rated at 0 if you can get your AGI below 80K (Adjusted gross income) for the moderately rich that's not too difficult.
I’m in HK where there is no CGT.
My position (in the absence of advice to the contrary) will be liquidating everything here and bringing it to the U.K. when I eventually move back.
When I’m here I’ll invest the bulk of it and leave a chunk in cash - likely a years drawdown which yes, I’ll top up with CGs and a couple of years living costs in case of a market correction.
My position (in the absence of advice to the contrary) will be liquidating everything here and bringing it to the U.K. when I eventually move back.
When I’m here I’ll invest the bulk of it and leave a chunk in cash - likely a years drawdown which yes, I’ll top up with CGs and a couple of years living costs in case of a market correction.
Royal Jelly said:
I’m in HK where there is no CGT.
My position (in the absence of advice to the contrary) will be liquidating everything here and bringing it to the U.K. when I eventually move back.
When I’m here I’ll invest the bulk of it and leave a chunk in cash - likely a years drawdown which yes, I’ll top up with CGs and a couple of years living costs in case of a market correction.
Sounds sound My position (in the absence of advice to the contrary) will be liquidating everything here and bringing it to the U.K. when I eventually move back.
When I’m here I’ll invest the bulk of it and leave a chunk in cash - likely a years drawdown which yes, I’ll top up with CGs and a couple of years living costs in case of a market correction.
The more cash you hold the less you have to worry about market corrections and the less UK transactions the better.
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