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Premium member Presentation Transcript ISAs: Enjoying the Capital Gains Tax Advantages : ISAs: Enjoying the Capital Gains Tax Advantages One of the biggest advantages to opening an ISA is the fact that you avoid paying capital gains taxes on the shares you sell profitably. : One of the biggest advantages to opening an ISA is the fact that you avoid paying capital gains taxes on the shares you sell profitably. This benefit has led many to explore their options in shares ISAs, even if they don’t completely understand the tax breaks involved. : This benefit has led many to explore their options in shares ISAs, even if they don’t completely understand the tax breaks involved. This article will explain capital gains tax in greater detail, helping you develop a clear picture of how an ISA can benefit you in this area. : This article will explain capital gains tax in greater detail, helping you develop a clear picture of how an ISA can benefit you in this area. What is Capital Gains Tax? : What is Capital Gains Tax? Simply put, capital gains tax is paid on money you make throughout the tax year. : Simply put, capital gains tax is paid on money you make throughout the tax year. It only applies to sales of items that have increased in value and is only applicable on gains of £10,100 or more. : It only applies to sales of items that have increased in value and is only applicable on gains of £10,100 or more. Capital gains tax is not applied to the following: : Capital gains tax is not applied to the following: Your home (primary residence) : Your home (primary residence) Your car : Your car UK government bonds : UK government bonds Lottery winnings : Lottery winnings Money that is accounted for as income : Money that is accounted for as income Money made on personal belongings that totals less than £6,000 : Money made on personal belongings that totals less than £6,000 Another “gain” that you do not have to pay tax on is money made from ISAs. : Another “gain” that you do not have to pay tax on is money made from ISAs. The amount of capital gain is calculated for the tax year, or from April 6 to April 5. : The amount of capital gain is calculated for the tax year, or from April 6 to April 5. Capital gains are reported with the rest of your annual income tax, using special pages allotted for this purpose. : Capital gains are reported with the rest of your annual income tax, using special pages allotted for this purpose. How is it Calculated? : How is it Calculated? Capital gains tax is determined using the following criteria: : Capital gains tax is determined using the following criteria: The amount of money received after selling an asset : The amount of money received after selling an asset Costs that reduced the amount of gains you earned : Costs that reduced the amount of gains you earned Losses on assets that would normally fit the capital gains definition : Losses on assets that would normally fit the capital gains definition The annual exempt amount, which is currently £10,100 : The annual exempt amount, which is currently £10,100 The individual would calculate the full amount of money received and subtract out any costs or losses to obtain a net asset amount. : The individual would calculate the full amount of money received and subtract out any costs or losses to obtain a net asset amount. This would be the figure upon which the capital gains tax amount would be based. : This would be the figure upon which the capital gains tax amount would be based. Of course, this is a simplified formula that is explained in more detail on the tax forms for capital gains reporting. : Of course, this is a simplified formula that is explained in more detail on the tax forms for capital gains reporting. If you have any questions about your capital gains tax, it is best to talk to a qualified tax advisor. : If you have any questions about your capital gains tax, it is best to talk to a qualified tax advisor. Can I Reduce My Capital Gains Obligation? : Can I Reduce My Capital Gains Obligation? In some cases, losses taken during the tax year can be used to offset capital gains tax for that year. : In some cases, losses taken during the tax year can be used to offset capital gains tax for that year. However, losses on ISA investments cannot be used for this purpose. : However, losses on ISA investments cannot be used for this purpose. Since you are not paying capital gains tax on the money you earn, you cannot use the same principle to offset gains on other investments with losses from these exempt financial products. : Since you are not paying capital gains tax on the money you earn, you cannot use the same principle to offset gains on other investments with losses from these exempt financial products. This is true of any loss you take that would not normally apply to capital gains tax, such as the sale of your car. : This is true of any loss you take that would not normally apply to capital gains tax, such as the sale of your car. How Much Will I Save? : How Much Will I Save? The capital gains tax benefit will vary from individual to individual and year to year. : The capital gains tax benefit will vary from individual to individual and year to year. Last year, the standard rate for capital gains tax was 18%. : Last year, the standard rate for capital gains tax was 18%. This means that for every £100 of capital gains earned, you would have to pay £18 in tax. : This means that for every £100 of capital gains earned, you would have to pay £18 in tax. The more you earn on your ISA, the greater the savings becomes. : The more you earn on your ISA, the greater the savings becomes. Saving capital gains tax is one of the biggest draws for opening an ISA. : Saving capital gains tax is one of the biggest draws for opening an ISA. If you have additional questions about the tax benefits of an ISA, talk to your tax advisor. : If you have additional questions about the tax benefits of an ISA, talk to your tax advisor. ISAs: Enjoying the Capital Gains Tax Advantages : ISAs: Enjoying the Capital Gains Tax Advantages You do not have the permission to view this presentation. In order to view it, please contact the author of the presentation.
ISAs: Enjoying the Capital Gains Tax Adv KellyShultis Download Post to : URL : Related Presentations : Share Add to Flag Embed Email Send to Blogs and Networks Add to Channel Uploaded from authorPOINT lite Insert YouTube videos in PowerPont slides with aS Desktop Copy embed code: (To copy code, click on the text box) Embed: URL: Thumbnail: WordPress Embed Customize Embed The presentation is successfully added In Your Favorites. Views: 88 Category: Business & Fin.. License: All Rights Reserved Like it (0) Dislike it (0) Added: April 28, 2010 This Presentation is Public Favorites: 0 Presentation Description For more details, visit Individual Savings Account Comments Posting comment... Premium member Presentation Transcript ISAs: Enjoying the Capital Gains Tax Advantages : ISAs: Enjoying the Capital Gains Tax Advantages One of the biggest advantages to opening an ISA is the fact that you avoid paying capital gains taxes on the shares you sell profitably. : One of the biggest advantages to opening an ISA is the fact that you avoid paying capital gains taxes on the shares you sell profitably. This benefit has led many to explore their options in shares ISAs, even if they don’t completely understand the tax breaks involved. : This benefit has led many to explore their options in shares ISAs, even if they don’t completely understand the tax breaks involved. This article will explain capital gains tax in greater detail, helping you develop a clear picture of how an ISA can benefit you in this area. : This article will explain capital gains tax in greater detail, helping you develop a clear picture of how an ISA can benefit you in this area. What is Capital Gains Tax? : What is Capital Gains Tax? Simply put, capital gains tax is paid on money you make throughout the tax year. : Simply put, capital gains tax is paid on money you make throughout the tax year. It only applies to sales of items that have increased in value and is only applicable on gains of £10,100 or more. : It only applies to sales of items that have increased in value and is only applicable on gains of £10,100 or more. Capital gains tax is not applied to the following: : Capital gains tax is not applied to the following: Your home (primary residence) : Your home (primary residence) Your car : Your car UK government bonds : UK government bonds Lottery winnings : Lottery winnings Money that is accounted for as income : Money that is accounted for as income Money made on personal belongings that totals less than £6,000 : Money made on personal belongings that totals less than £6,000 Another “gain” that you do not have to pay tax on is money made from ISAs. : Another “gain” that you do not have to pay tax on is money made from ISAs. The amount of capital gain is calculated for the tax year, or from April 6 to April 5. : The amount of capital gain is calculated for the tax year, or from April 6 to April 5. Capital gains are reported with the rest of your annual income tax, using special pages allotted for this purpose. : Capital gains are reported with the rest of your annual income tax, using special pages allotted for this purpose. How is it Calculated? : How is it Calculated? Capital gains tax is determined using the following criteria: : Capital gains tax is determined using the following criteria: The amount of money received after selling an asset : The amount of money received after selling an asset Costs that reduced the amount of gains you earned : Costs that reduced the amount of gains you earned Losses on assets that would normally fit the capital gains definition : Losses on assets that would normally fit the capital gains definition The annual exempt amount, which is currently £10,100 : The annual exempt amount, which is currently £10,100 The individual would calculate the full amount of money received and subtract out any costs or losses to obtain a net asset amount. : The individual would calculate the full amount of money received and subtract out any costs or losses to obtain a net asset amount. This would be the figure upon which the capital gains tax amount would be based. : This would be the figure upon which the capital gains tax amount would be based. Of course, this is a simplified formula that is explained in more detail on the tax forms for capital gains reporting. : Of course, this is a simplified formula that is explained in more detail on the tax forms for capital gains reporting. If you have any questions about your capital gains tax, it is best to talk to a qualified tax advisor. : If you have any questions about your capital gains tax, it is best to talk to a qualified tax advisor. Can I Reduce My Capital Gains Obligation? : Can I Reduce My Capital Gains Obligation? In some cases, losses taken during the tax year can be used to offset capital gains tax for that year. : In some cases, losses taken during the tax year can be used to offset capital gains tax for that year. However, losses on ISA investments cannot be used for this purpose. : However, losses on ISA investments cannot be used for this purpose. Since you are not paying capital gains tax on the money you earn, you cannot use the same principle to offset gains on other investments with losses from these exempt financial products. : Since you are not paying capital gains tax on the money you earn, you cannot use the same principle to offset gains on other investments with losses from these exempt financial products. This is true of any loss you take that would not normally apply to capital gains tax, such as the sale of your car. : This is true of any loss you take that would not normally apply to capital gains tax, such as the sale of your car. How Much Will I Save? : How Much Will I Save? The capital gains tax benefit will vary from individual to individual and year to year. : The capital gains tax benefit will vary from individual to individual and year to year. Last year, the standard rate for capital gains tax was 18%. : Last year, the standard rate for capital gains tax was 18%. This means that for every £100 of capital gains earned, you would have to pay £18 in tax. : This means that for every £100 of capital gains earned, you would have to pay £18 in tax. The more you earn on your ISA, the greater the savings becomes. : The more you earn on your ISA, the greater the savings becomes. Saving capital gains tax is one of the biggest draws for opening an ISA. : Saving capital gains tax is one of the biggest draws for opening an ISA. If you have additional questions about the tax benefits of an ISA, talk to your tax advisor. : If you have additional questions about the tax benefits of an ISA, talk to your tax advisor. ISAs: Enjoying the Capital Gains Tax Advantages : ISAs: Enjoying the Capital Gains Tax Advantages