another CGT question
Discussion
If the income is derived from the disposal of a Capital Asset, then it will be taxed under CGT rules. If the income is derived from income GENERATED by a Capital Investment, that is deemed to be Investment Income and taxable under the Income Tax rules pertaining to that type of Investment Income.
Where the line is between these two scenarios is not always clear. If in doubt, check with the organisation with whom you have invested with as they may (read "should") have clarified with HMRC how the income should be treated for tax purposes.
The easiest way to look on the situation is, has the income been gnerated by a disposal or part disposal of the asset you originally purchased. If it has, it's a Capital Disposal. If it hasn't, then it is investment income.
Usually when such an investment gives rise to income, you are issued with a certificate by the investment organisation telling you how it should be disclosed for tax purposes.
The CGT annual allowance is currently £10,100 by the way.
Where the line is between these two scenarios is not always clear. If in doubt, check with the organisation with whom you have invested with as they may (read "should") have clarified with HMRC how the income should be treated for tax purposes.
The easiest way to look on the situation is, has the income been gnerated by a disposal or part disposal of the asset you originally purchased. If it has, it's a Capital Disposal. If it hasn't, then it is investment income.
Usually when such an investment gives rise to income, you are issued with a certificate by the investment organisation telling you how it should be disclosed for tax purposes.
The CGT annual allowance is currently £10,100 by the way.
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