Investment & Investing

OK, I'll ask differently (and should probably just speak with an ifa but what they heck). If you are expecting to receive more than £30k in a lump sum which CGT would be due for and in a higher rate tax bracket - what is the most tax efficient way of dealing with that.

If it really is about 30k, any chance of spreading it over 2 years depositing it in ISAs (if you're not already close to your limit) and in the year when half is yet to be put in, invest in a fund that pays dividend + use £2k dividend exemption for that first year)?

(Caveat - I may not know what I'm talking about)

yeah, 20k in isa now, the rest in the isa in April

Can I put money into an ISA in my wife's as well?

yep

I have US tracker in my Hargreaves Lansdown stocks and shares ISA

@Tenderloin this. check "gifts to spouse" tax rules tho (don't know your circumstances)

or crypto. and sell a bit every year so you never need to pay CGT.

So after all of this discussion, anyone have a tax accountant good with stock trading? I've been researching it and it sounds like a minefield for the uninitiated.

I obviously need some professional help 😂

Yeah - its not immediate (or certain) but one that I wanted to just think about.

On crypto is that right? I've I got £x0k in a tax year from a sale of equity then I could buy crypto and pay 0 tax?

if your gains from crypto in a given tax year exceed the CGT allowance then you'll need to pay CGT. HMRC treat it like any other asset

On crypto is that right?

no definitely not. will have to pay CGT on whatever you gain; before it goes into 1-2 ISAs

CGT is charged when you realise a gain (i.e. sell something for more than you paid for it). There are some weird exceptions, crypto isn't one of them.

I think maybe there's some confusion here.

I've I got £x0k in a tax year from a sale of equity

You have the equity now and want to minimise the CGT liable when you sell it?

If you can sell it off a bit at a time then you can harvest this year's CGT allowance (which is about £12k) and next year's from April for a total of £24k tax free. So if it's a £30k net gain (sale price minus purchase price) you'd pay CGT on the remaining £6k.

If you have to sell it all at once then you have to pay CGT on the lot (above the threshold). I don't think there's a way around that. Well, actually there almost certainly is a way around it (by offsetting losses or something? Not sure) but possibly best off talking to a professional for that.

The discussion of ISAs in this thread is more about avoiding future CGT when you already have a pile of cash. Which isn't the situation you're in if I understand correctly

wait, are you looking at ways to reduce the cgt on money you all ready have from a sale? If so, there's not much you can do. You could make losses on other things to offset it?

edit: what frankenbike said ^

Are there are any crypto trackers that you could put in a stocks and shares ISA/can you put crypto in a stocks and shares ISA?

I'm assuming not but on the off-chance some of the more outlandish valuations do come to fruition at some point in the distant future there could be some very hefty tax bills.

XBT PROVIDER BITCOIN TRACKER ONE (BIT-XBT)

Is available for ISA/SIPP through Hargreaves Lansdown.

2.5% management fee? Spicy.

OK right - yeah this is why I was getting confused about from earlier ISA chat. Which is why I was saying about shoving it all in a pension.

You can offset losses from the last 4 years against it I think. So if you had the foresight to lose £18k on GME/Bitcoin last year you'd be fine.

It will still attract CGT if you put it in your pension or in an ISA. In your pension it will offset some income tax, but it's not accessible like an ISA.

Possibly a good plan is to dump it into your pension until you hit the lower tax band for relief, and then do the same next year and so on until it's gone. That way you get 67% on top of what you pay in (for every £6 you put in you get £10 in the pension). If you dump all in at once and go into the 20% band, you benefit less. But in your pension you obviously have to wait until retirement to access it again.

Important to state that I am fucking miles out of my depth and you'd have to be bonkers to take my advice. I would at the very least ask on https://www.reddit.com/r/UKPersonalFinance/ if I were you, they are wizards. Or the MSE forum maybe.

Important to state that I am fucking miles out of my depth and you'd have to be bonkers to take my advice.

One thing I've learnt from GME is this is the only advice I'd need.

:) yeah I will do but thanks that info is still helpful.

Im basically stressing that cgt goes up to income tax level :'(

It will still attract CGT if you put it in your pension or in an ISA. In your pension it will offset some income tax, but it's not accessible like an ISA.

Uhhh, I think CGT doesn't apply to pensions or ISAs:

https://www.moneyadviceservice.org.uk/en/articles/isas-and-other-tax-efficient-ways-to-save-or-invest#your-capital-gains-tax-exemptions

I've got a guide to CGT from Hargreaves Lansdown which says:

WHAT DO YOU PAY CGT ON?
Shares
Funds
Investment trusts
ETFs
Land
Investment and second properties
Other possessions, like art, worth
at least £6,000

WHAT DON’T YOU PAY CGT ON?
The family home*
Most personal possessions
Possessions that depreciate
UK government bonds (gilts)
ISA investments
Pension investments
Venture capital trusts (VCTS)
Enterprise investment schemed (EIS)

Am I mad to put create an emergency fund in premium bonds? I've got 3 months worth in my current account just sitting there I can move, but undecided on that or an easy access account somewhere...

You're looking at a different thing I think.

Tenderloin wants to sell something without getting shredded by Sunak's (possible) 2021 40% CGT-deluxe. AIUI they were asking whether dumping into pension would alleviate the CGT (as is the case with income tax/income that you dump into pension). I was saying no, you still have to pay CGT, but can dump whatever remains into pension to offset income tax. Not that the pension itself would attract CGT

Clear as mud 🙃