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Confused myself with CGT

Practical Issues
raybarrow
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Confused myself with CGT

#598157

Postby raybarrow » June 26th, 2023, 6:01 pm

Hi Folks,
Sold the inherited house. The inhertance was shared 3 ways. My share of the sale less less value at inheritance less sale expenses approx £25,000. Deduct CGT alllowance £6,000 leaves £19,000 on which to pay CGT. So far so good.
Having a dry run on the form to report CGT. It all looked straightforward at the start and then I got a bit confused.
Two questions on the form:
1. What do you believe your gross income will be in the tax year of disposal?
The amount should be your total estimated earnings for the tax year of disposal before any tax is taken off (income taxable
in the UK only, do not include capital gains or monies received from disposals). You do not need to answer this question if
you’re a personal representative of an estate.

That seems straightforward . Pensions/interest/dividends as I would put on the Self Assessment.

Then there is this question which seems to contradict itelf. '
2. How much of your Personal Allowance do you want to apply?
You cannot deduct your Personal Allowance from your gain (see ‘Personal Allowance’ in the notes). You do not need to
answer this question if you’re a personal representative of an estate[/i]
How do you want to use the PA' and then 'you cannot deduct the PA'. Is it just badly worded?

So do I put my £12570 Personal Allowance in here or not? Why would I not want to use my personal allowance?

In my head what happens is Gross Income say £30000 less PA £12570 leaves £17430 plus CGT gain £19000 equals £36430 which is below the Higher Tax Band (£37700) so I pay CGT at 18%.
Actually writing this down makes it clearer in my head, if I have got it right.

Any comments appreciated,
Ray.

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