Cgt and student loans

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    Cgt and student loans

    Hi, I am planning on using wife to bring down my bill by using her allowances etc, she is a low earner and has a student loan which she hasn't got to start paying back until she earns 21k plus.

    Would a capital tax gain effect this? Is it classed as earning etc.

    I would appreciate your thoughts.

    #2
    Capital gains are not earnings.
    How they affect student loans, I don't know.

    I would imagine her income from the property rent would count towards the threshold at which repayment is triggered.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

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      #3
      The asset is in your name and therefore any profits from its sale less the annual allowance is taxed , the sharing of rental is an entirely separate matter and as JPKeates has correctly indicated will not only have to be declared by your wife on her annual tax return but more importantly will be added to whatever other income she is in receipt of and if this trips over the tax point for student loans then the repayment of the student loan kicks in. You might find that you benefit from the sharing only to find that it bites your wife in her pocket.

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        #4
        I've asked around and tho capital gains is not earnings and my wife dosent have any of the rental income, as to student loan it seems no knows

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          #5
          When she enquired of student loans mob, what did they say, please?
          I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

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            #6
            Originally posted by jase222 View Post
            I've asked around and tho capital gains is not earnings and my wife dosent have any of the rental income, as to student loan it seems no knows
            Your wife can't share in the capital growth and not the rental income.

            You can vary the proportions of ownership so she receives a small share of the income and then change the ownership before disposal so you share the capital gain differently, but the "small share" can't be zero.

            If the "small share" is less than £1,000 per annum, it doesn't need to be declared to HMRC for tax, and so probably won't trigger any loan repayment (whether it should or not isn't something I know).
            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

            Comment


              #7
              Hi Jase,

              The amount of earnings that shall be subject to a student loan repayment is as follows:

              Earnings for Class 1 NIC - threshold.

              Rental income and / or capital gains are not subject to Class 1 NIC so will not come within the scope of the calculation.

              Emma

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