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CGT and higher rate taxpayer

Richard2013Richard2013 Just JoinedRegistered Posts: 23

I was just studying CGT when the following question came to my mind:
Tax year 13/14
Person: Mr. Guy Simples 25, no pension contribution or gift aid payments.
He is a basic rate taxpayer and has a taxable income(income less PA, ie. 39440-9440) of £30,000.00 for income tax. He has made a chargeable gain by selling an antique furniture for £20,000.00. The furniture cost him £5000 say 5 years ago. Doing the calculations, his chargeable gain is 20000-5000-10900= £4100.
His income for IT would be taxed at 20%: 30000 @20% = £6000
His CGT would be: 2010 @ 18% = £361.80 and 2090 @28% = £585.20

Would this chargeable gain make him a "higher rate taxpayer" therefore affecting his entitlement to tax-free childcare vouchers of £55 a week?


  • MarieNoelleMarieNoelle Trusted Regular Hampshire/Surrey borderModerator, MAAT, AAT Licensed Accountant Posts: 1,431
    Hi Richard
    If I remember, childcare vouchers entitlement is based on earnings from employment so I do not think capital gains would come into the calculation. Out of interest is this an AAT question or just a theoretical example?
  • Richard2013Richard2013 Just Joined Registered Posts: 23
    Just a theoretical example.
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