Crosswords3 mins ago
Capital Gains Tax
6 Answers
Sorry just a boring general question. When you have paid off your mortgage and then when your getting a bit older and the kids have finally moved out etc, and you decide to move to a smaller property, are you liable for capital gains tax if your new property cost less than your new one. I'm just wondering because I currently do not have a private pension and was wondering whether I would be able to put the difference towards one. Any suggestions guys?
Answers
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When you sell the house the money you have left over is not taxable as CGT but you may have to pay tax in other ways depending on where you chose to put it.
If you put it into a pension you actually get tax relief off the taxman,which is free money. But you will have to pay tax on your pension when you draw it in the same way as you pay tax as an employee. You can pay 100% of your earnings into your pension per year,so you can't necessarily put it all in a pension in one go.
If you put it into a savings account you will have to pay tax on the interest assuming you are a taxpayer.
If you put it into a pension you actually get tax relief off the taxman,which is free money. But you will have to pay tax on your pension when you draw it in the same way as you pay tax as an employee. You can pay 100% of your earnings into your pension per year,so you can't necessarily put it all in a pension in one go.
If you put it into a savings account you will have to pay tax on the interest assuming you are a taxpayer.
If you continue paying until maturity then you don't have to pay tax,but if you surrender it,sell it or make it paid up then you might have to.
This might help:-
http://news.bbc.co.uk/1/hi/programmes/working_ lunch/3142682.stm
Scroll down about 2/3 of the way down the page to get to the bits that apply to you.
This might help:-
http://news.bbc.co.uk/1/hi/programmes/working_ lunch/3142682.stm
Scroll down about 2/3 of the way down the page to get to the bits that apply to you.
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