Hi all,

I'm a professional poker player residing in the UK and looking for some clarity on the tax situation on investments when you have no other taxable income. Maybe some of you out there have encountered it yourself.

My annual Personal Allowance (PA) for Income Tax is £12,570, and my Capital Gains Tax (CGT) allowance is £6,000. I have no other income outside of poker (which is of course untaxed) and investments. Some of my investments are tax-free; namely ISA's and Premium Bonds, however within the most recent tax year I've opened a general investment account which has realised gains of roughly £14,000.

Am I right in thinking that if I dispose of the gains my PA covers me for all but ~£1,400, on which I'll be taxed at the standard rate of 10%? Or does my CGT allowance cover me for the remainder also?

Additionally, if I'm covered by both allowances should I still file a tax-free return with HMRC for transparency?

Many thanks

IANAA.

My understanding is the sums are 14000 - 6000 = 8000 taxable gain.

0 taxable other income + 8000 = 8000, which is below the PA so no income tax to pay.

https://www.gov.uk/capital-gains-tax/rates has a worked example.

I think you do need to submit a SA, see https://www.gov.uk/check-if-you-need-tax-return. The "Did you get more than £10,000 from dividends or savings and investments?" seems to be the trigger for a 'yes' answer.

you cant use your personal allowance against capital gains

you mention realised gains, but subsequently about 'disposing of your gains', so i'm unclear as to whether you have actually sold your investments (realised gains refers to gains which are crystallised on a sale. if the assets which have gone up in value are still in your possession then you have unrealised gains, which is not a taxable event)

if you have sold the stuff and have 14k of realised gains then you are liable to pay CGT on 14k less your CGT allowance of 6k = 8k @ 10%, and you'll have to submit a tax return to report it

if you have not yet realised any gains then i suggest you sell enough such that your overall crystallised gain is 6k or less as you wont have any tax to pay nor an obligation to file a return

note that from next tax year (ie from 6 april 2024) your CGT allowance falls to 3k

Thanks for the replies, much appreciated.

I now realise I had also confused profit with gain, and figured that selling the entire annual profit = gain on which CGT must be paid. In fact, that would only be the total gain had I sold the entire portfolio.

Many thanks.

Dividends are classed as income which can be offset against your personal allowance of £12570 so any dividend income wont be part of what you owe in CGT. Now is a good time to sell whatever u want to below the CGT allowance and can put £20k straight into a ISA after the 6th of April to tax shelter it.