FAQ for Tax in the United Kingdom

The annual exempt capital gains tax is not related to your ISA allowance. As has been said, anything in an ISA is not taxable.
The annual exempt is for any gains that is outside the ISA wrap.

This is not misleading, it is correct that any profits in an ISA are not reportable or taxable.

The capital gains exemption amount you mention, is for any gains outside an ISA. For more details please see the HMRC website/forum.

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As usual it depends on how you interpret that sentence. Computations may mean Profit/Loss/Fees, or you may want to attach an Excel sheet with the detailed information imported from your account.

Hmm, that is interesting. I haven’t submitted so I am not sure what will be required at the submit stage. Have you had to submit and if so, did it let you submit without attaching any documents?

As it says in the screenshot “… either in the additional information section or as an attachment”, so an attachment is optional.
In any case, if HMRC requires more information they will request it.

Edit: I haven’t submitted this year’s return yet, did not reach the threshold last year.

Thank you. So just to clarify, as you interpret it- You add up all the purchases you’ve made, all the sales, all the associated cost and then work out the profit or loss and don’t need to go into details for each of the different stocks that have been disposed off? Is this right? Is this what you’ve done in the past when you’ve had to submit? Apologies for the many questions but this is my first time so I’m quite new to all this.

No problem at all.
You may also think of it this way, you will need to keep your detailed calculations (i.e. each buy and sell transaction) anyway, so if in doubt, you may just attach them.

I’ve got the computations alright but not in the format HRMC wants as there are some right isses and bed and breakfasting rules that need applying so I will need to produce it in that format. I don’t actually have anything to pay as I am under the personal allowance but I traded a lot- (rookie mistake as I didn’t know the complexities of bed and breakfasting rules) so my disposal is above £49200 and that is why I need to complete the CGT section.

Ah wow, I was always under the impression anything over £12,300 capital gains needed to be declared, even in an ISA?

That’s great news (not that I’m anywhere near that yet :smiley: )

I always add my own attachment rather than use worksheets, and in it I prepare a separate line for each sale. That is what a professional accountant would do. When the stock that I have sold was purchased on multiple dates then I write for purchase date “Section 104 holding.” The worksheets are only for people with very few sales. I include in my attachment all the same information that would be given if I had used the worksheets. See page 16 of the notes for what a worksheet contains (google SA108 Notes).

Here is what HMRC say about attachments to their own agents.

In all circumstances where the Capital Gains pages have been completed, the return must be accompanied by capital gains computations. The computations may be shown in the additional information box or sent as an attachment to the return. If there is no entry in the additional information box or any attachment, the return is unsatisfactory and should be sent back to the taxpayer after being unlogged

As you will see by reading the above, HMRC will probably not inspect your computations. They only look to see there is some attachment, in the first instance. There is no hard rule what they must contain. My aim is to make my computations so obviously thorough, accurate and well organised that an inspector will nod and move on. So I give all the information I would put on worksheets, but in spreadsheet lines rather than multiple individual worksheet pages.

A friend was once called in by HMRC for a face to face random tax audit. It lasted a very short time for as soon as the inspector saw how well my friend had kept his records and was well-informed about the proper tax calculations the inspector knew there would be nothing amiss and ended the meeting in short order.

This discussion on the HMRC forum is helpful

https://community.hmrc.gov.uk/forums/customerforums/sa/b13410b1-e23e-ea11-b698-00155d9c7744

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Great writeup, thank you @Richard.W

Also a stock/crypto calculator might be useful for some people.

Just a quick one, the tax year in the first point has a typo. The tax year is from the 6th to the following 5th, not the 5th to 6th. The way it’s written would mean a tax year overlap of a day.

  • I’ve corrected, thanks, Richard
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Can you help me to understand correctly??? @Richard.W

,You can have several S&S ISAs open and can trade in them, with different providers whenever you like. But you can only add new money to one S&S ISA each tax year,

So for example I have 2 ISA accounts trading 212 and freetade
First year I contribute to trading212
Next year I start using freetade and adding new money here.
What i need to do with money from trading 212 because I still receive dividends or even sell company.
Because i can’t add back trading 212. Right?

If i understand correctly i must withdrawal my old investing dividends and then add to my freetade new account what I chosen for this new tax year right?
Thank you if someone can explain.:roll_eyes:

@D3ivas your understanding is slightly off.

The annual ISA deposit limit only covers new money from yourself(less cash withdrawals on a flexible ISA).

Any gains made from funds once within the ISA wrapper do not count towards your annual allowance. It doesn’t matter if those gains are interest/dividend/return if capital or capital gains. They do not impact your annual ISA allowance as are not new money contributed by yourself.

@Richard.W perhaps we modify the point the limit is that up to 20k in total of new money can be added to your ISAs each year, that could be split over one of each ISA wrapper type. Gains or losses of any type inside the ISA wrappers do not impact this amount.

I’ll leave the wording to you :wink:

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Hi!
Does anyone have experience with filing tax returns for offshore accounts?

I have some off-shore dividends and capital gains to file (got some dividends from a German company, sold their shares afterwards and transferred the money into my UK ISA and also hold an excess reportable income generating ETF, all in a German account). Do I file all of those in the SA100/101 or SA106 pages? If SA106, do I have to do an extra entry for transferring(/remitting?) the dividend and CG money over to my UK ISA?

Everything is within the dividend and capital gains allowance limit (I think I’m UK domiciled and resident for tax purposes :wink: ) but I figured I should report it anyway. I’d appreciate any pointers on how to proceed here :slight_smile:

An ISA is seperate to an.invest account. If your in the UK its a no brainer.

I dont see why this is so complicated. We all have a captial gains tax allowance of £12300 so you dont pay any tax on anything under that amount of earnings. Example you invest £1000 you make £11300 you are still within your tax free allowance.

An ISA is a privelege that us Brits have that we should all utilise. You can put in £20k every year into that account and what ever money you make from.it is tax free. It could be a million pound you make from that £20k investment you put in your ISA and you wont need to pay ant tax on it.

P.s i used to work for HMRC. Don’t make it difficult and also if there is any confusion HMRC has great examples on its website if you still don’t understand.

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Hi,
Does this mean that one can top up 20000 GBP every year in ISA account ? This way it would be 40000 GBP in two years. I thought it was 20000 GBP in total regardless of the years. May be I am wrong, please correct me !

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Yes you can top up by 20k every year

Big highlight! :smiley:
The flexible ISA information does NOT apply to the T212 ISA.

Something else, would it maybe be worth mentioning that losses in an ISA cannot be used to off-set capital gains tax? (eg. Profits from a taxable investment account eg. the “Invest” account)

At least that´s how I understand it, please let me know if it is not the case :slight_smile: .

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