I have a question regarding Capital Gains Tax that I need to pose to the collective wisdom of the forum.

In the scenario where an individual has stopped working but has not yet started drawing a pension - but has no income from paid employemt - what are the CGT rules?

I think the following might be the case, but I am always nervous about taking the best case interpretation!

- The CGT allowance for 2019-20 is £12,000. The Personal Allowance is £12,000, too.

- If you make a Capital Gain of £20,000 in 2019-20 then I think you deduct the £12,000 CGT allowance from the gain leaving £8,000.

- But, as you have no other income the £8,000 of taxable gain is set against your £12,000 personal allowance. Hence no CGT or Income Tax to pay.

- And if you had dividend income (from stocks not a company) of £2,000 then that would be wholly set against the £2,000 dividend income allowance, too.

Is that right, or am I being too optimistic?


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