Lump sum and pension

I

Inigo

Guest
I may be coming into a reasonable windfall from some online trading. As of right now I am not earning as I was a mature student for 4 years but I'll be working again soon. I have a modest pension pot from a previous pension.

I'd obviously like to not get hit too badly for CGT - do I have any options to dump the gains in to a pension and get tax benefits? Or is there any other way to minimise the hit as I'm not paying any PAYE at the moment? I presume I can't treat my online trading as income rather than capital gains, or can I? That would actually be better for me tax-wise as I'm not earning.

I may let the gains ride for a while more as I'm confident of more gains and I don't plan to cash out just yet. Are there any reasons to cash out sooner or later as regards tax or pensions?
 
You claim income tax relief on earned income. You cannot put money into a pension and claim tax relief against CGT. Online trading is not deemed as earned income, so you cannot claim any pension tax relief.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
Merowig said:
Is it possible to transfer shares into a selfdirected PRSA?
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It has to be arms length, so you can't transfer an asset you already own into a pension structure. You have to sell them and then buy them back through the pension. You'd therefore have to pay CGT on the gains.


Steven
http://www.bluewaterfp.ie (www.bluewaterfp.ie)
 
SBarrett said:
You claim income tax relief on earned income. You cannot put money into a pension and claim tax relief against CGT. Online trading is not deemed as earned income, so you cannot claim any pension tax relief.
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Is there no way at all to justify trading as income? I thought it was possible, just tricky.
 
SBarrett said:
It has to be arms length, so you can't transfer an asset you already own into a pension structure. You have to sell them and then buy them back through the pension. You'd therefore have to pay CGT on the gains.
Click to expand...

Thanks Steven. How hard would it be to set up a pension to hold shares or other virtual assets or even tangible assets? like property I presume you really need a significant amount to justify it?
 
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