In relation to the 5000 euro threshold on non-PAYE income to remain PAYE assessed

[BlueHorseShoe]

Does this 5000 threshold also include gross income liable to CGT before the CGT exemption of 1270 is applied ?

Example lets say you earn 1270 from shares do you add this to DIRT interest to calculate total non-PAYE income ?

 

[Corola]

Depends what you mean by "earn 1270 from shares".

The CGT exemption doesn't apply to income, it applies to gains. If you received €1,270 of dividends then you add it to non-PAYE income. If you sold shares and made a €1,270 gain then you do not add it to non-PAYE income.

 

[ClubMan]

Does this 5000 threshold also include gross income liable to CGT before the CGT exemption of 1270 is applied ?

Income isn't subject to CGT, capital gains are.

But the following suggests that you are actually talking about share dividends which are assessable for income tax?

Example lets say you earn 1270 from shares do you add this to DIRT interest to calculate total non-PAYE income ?

 

[BlueHorseShoe]

Income isn't subject to CGT, capital gains are.

But the following suggests that you are actually talking about share dividends which are assessable for income tax?

I am talking about non-PAYE income threshold of 5000 and what counts towards this threshold - even though savings interest is charged DIRT and share profits are charged CGT both may be considered non-PAYE income for the purpose of tax assessment - the question is whether CGT is included net of 1270 exemption or gross - if you earn more than 5000 you do self assessment and owe an additional 4% PRSI

 

[Protocol]

Capital gains on the disposal of assets, e.g. shares, are nothing to do with income tax.


Dividends earning from owning shares are subject to income tax.

 

[BlueHorseShoe]

Capital gains on the disposal of assets, e.g. shares, are nothing to do with income tax.


Dividends earning from owning shares are subject to income tax.

I am talking about the 5000 non-paye threshold to determine how to report tax to revenue not income tax - over 5000 you self assess - under 5000 its reported under PAYE systema non-paye income - the question is whether share profits are recorded gross or net of 1270 for non-paye earnings

 

[Protocol]

Who should register for Income Tax self-assessment?

This page outlines who should register for Income Tax self-assessment

www.revenue.ie

Who should register for Income Tax self-assessment?​

You should register for Income Tax self-assessment if:

• you are self-employed
• your only, or main, source of income is:
  • rental income
  • investment income
  • foreign income (including foreign pensions)
  • maintenance payments
  • fees that are exempt from Pay As You Earn (PAYE)
• or
• you have profited from share options or share incentives.

You must register for self-assessment if:

• your taxable non-PAYE income exceeds €5,000
• or
• your gross non-PAYE income exceeds €30,000.

 

[Protocol]

You must register for self-assessment if:

• your taxable non-PAYE income exceeds €5,000
• or
• your gross non-PAYE income exceeds €30,000.

Capital gains made from disposing of assets are not included in either the 5k or 30k figures here.

Capital gains are not income.

 

[BlueHorseShoe]

You must register for self-assessment if:

• your taxable non-PAYE income exceeds €5,000
• or
• your gross non-PAYE income exceeds €30,000.

Capital gains made from disposing of assets are not included in either the 5k or 30k figures here.

Capital gains are not income.

Thanks that answers the question - so I could earn 1270 tax free in capital gains (and indeed more but taxable) from selling shares as well as under 5000 in savings interest and remain PAYE assessed not self assessed (as 4% PRSI would also be due if over 5000)

 

[BlueHorseShoe]

You must register for self-assessment if:

• your taxable non-PAYE income exceeds €5,000
• or
• your gross non-PAYE income exceeds €30,000.

Capital gains made from disposing of assets are not included in either the 5k or 30k figures here.

Capital gains are not income.

That said - what if you day trade - buy and sell shares over a period of a few months to make the 1270 tax free amount - would that be considered income ?

 

[ClubMan]

That said - what if you day trade - buy and sell shares over a period of a few months to make the 1270 tax free amount - would that be considered income ?

Tax and Duty Manual Part 02-02-06

Executive Summary

The purpose of this manual is to provide general guidance on the classification of activities as trading. This manual sets out guidance on what constitutes trading and includes information from a body of previously decided cases which will assist taxpayers and Revenue Divisions.