Self Assessment Capital Gain Exemption

[Lucky Phil]

Hi guys,

Looking for a bit of advice on submitting Self Assessment Tax Return (SATR). Never done one before and long ceased paying my Limited Company provider so I am on my own with this one.

I closed my Ltd Co in Feb 2020 and there was a net profit figure of GBP 8064 in it which I am treating as capital (asset upon closure). As this is under the exemption then I am hoping it is straight forward

Accountants have said this "You would then need to ensure you complete the personal tax return for the tax year, however as the gain will be below the capital exemption, then technically it could even be excluded when you file your personal tax return."

My questions are

1) Could it be excluded from my Tax Return? Can I simply omit the Capital Gains section? I have a feeling they will tell me anything now I am not paying them?
2) On The Capital gains section of SATR in which section should I disclose this?

Residential property and carried interest

Other property, assets and gains

Listed Shares

Unlisted Shares

Non-resident Capital Gains Tax (NRCGT) on UK property or land and indirect disposals

I am assuming the Unlisted Shares option. This has a box for Gains in the year, before losses: (optional) would this be the correct section to disclose this, should I wish?

Thanks
Phil

[northernladuk]

They would be stupid to give you incorrect advice just becaue aren't paying them. Ring them and ask. Cost you nothing.

[TheCyclingProgrammer]

LMGTFY

If your total gains are less than the tax-free allowance
You do not have to pay tax if your total taxable gains are under your Capital Gains Tax allowance.

You still need to report your gains in your tax return if both of the following apply:

the total amount you sold the assets for was more than 4 times your allowance
you’re registered for Self Assessment

Capital Gains Tax: Work out if you need to pay - GOV.UK

[northernladuk]

Lot of people leaving all this very late

[Lance]

is it wise to take the money as capital?
It means you can't start contracting again in 2 years.

Given we don't what's going to happen next month never mind the next two years, maybe it would be best to take this as dividend?

The option you want is 'unlisted shares' as you already realise.

[luxCon]

is it wise to take the money as capital?
It means you can't start contracting again in 2 years.

Given we don't what's going to happen next month never mind the next two years, maybe it would be best to take this as dividend?

The option you want is 'unlisted shares' as you already realise.

He's talking about £8064 capital. So the liability on this is £806 if he chooses to contract.
There is sometimes too much doom and gloom on these threads that can seriously mislead and misinform

And circumstances are ALLOWED to be changed, its not as if people are committing multi million pounds tax evasion

[Paralytic]

And circumstances are ALLOWED to be changed, its not as if people are committing multi million pounds tax evasion

For future reference, at what monetary level do you think can we advise people it is ok commit tax evasion?

[Lance]

He's talking about £8064 capital. So the liability on this is £806 if he chooses to contract.
There is sometimes too much doom and gloom on these threads that can seriously mislead and misinform

And circumstances are ALLOWED to be changed, its not as if people are committing multi million pounds tax evasion

you are quite right. It's all about risk and attitude. For more information on that see here https://www.contractoruk.com/forums/...eme-enquiries/

there's a lot of people throwing the towel in right now. And whilst we're not all experts here, the least we can do is advise what we know, and what we'd do.

Also note that the liability could include penalties + interest + legal expenses + stress + potential investigation into the company's and personal history.

EDIT: That liability figure is wrong anyway. The OP wouldn't be avoiding £806 tax. There's no tax to pay on a capital gain that small. The issue is whether it would be legal to start a new company.

For the record. I think the OP is doing the right thing. It's what I'd do if I wasn't a contractor. I was just asking whether the OP had considered it.

[Craig@Clarity]

If HMRC aren't expecting you to submit a tax return and all your other income is through PAYE then you don't need to create and file one as the capital gain is less than the allowance amount.

If you're expected to file a tax return, you can exclude it from the CGT pages and just fill in everything else that relates to income, pensions, charity donations etc.