Tax when selling shares

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cashbackproblems
cashbackproblems Posts: 1,826 Forumite
in Savings & investments
I opened a non-ISA share dealing account many years ago and bought shares in a company that has done quite well. At the time there were no S+S ISA’s.


I will most likely be making profits of 10k+ on that share, so subject to CGT. But will this tax be taken out automatically on sale or will I have to declare it to HMRC?


Also if I sell across 2 years (assuming profit of 20k) will I avoid paying tax?


And is it worth selling and rebuying in an ISA? As the buying fee is only 5£ but I would lose out on the spreads?


Thanks


Comments

  • Vortigern
    Vortigern Posts: 3,247 Forumite
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    If liable for CGT you have to declare it to HMRC, your broker will not deduct this tax.

    Yes you can avoid by splitting your sale over two tax years. Act quickly.

    If you transfer them all to an ISA in one go, you'll create a taxable gain in the year of transfer, but avoid any future taxation. It may be worth it if you plan to keep these shares.
  • cashbackproblems
    cashbackproblems Posts: 1,826 Forumite
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    ok thanks, the main thing is whether its an ISA or Non-ISA is you only pay tax if you declare it to HMRC. I probably will just leave them then and spread out the sale over a few years.


    How about any dividends do they get taxed in a normal account but not in an ISA?
  • Reaper
    Reaper Posts: 7,284 Forumite
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    Dividend tax has changed recently. Currently the first £5000 is tax free, then taxed as described here:
    https://www.gov.uk/tax-on-dividends/how-dividends-are-taxed

    After April 2018 that drops to a £2000 tax free allowance.

    You don't need to pay tax on dividends or even declare them if they are in an ISA.
  • frugalmacdugal
    frugalmacdugal Posts: 10,077 Forumite
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    Hi,

    the CGT allowance is currently £11,100.
  • Sceptic001
    Sceptic001 Posts: 1,111 Forumite
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    FYI, according to the .gov website
    Even if your gains are below the tax-free allowance, tell HM Revenue and Customs (HMRC) if:

    you disposed of chargeable assets with an overall worth of more than 4 times the Capital Gains Tax allowance - this works out as £44,400 for the 2016 to 2017 tax year
    https://www.gov.uk/capital-gains-tax/work-out-need-to-pay
  • Keep_pedalling
    Keep_pedalling Posts: 16,727 Forumite
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    Now would be a good time to sell half, and sell the other half after April 5th which on a £20k gain would leave you with no tax to pay.
  • AnotherJoe
    AnotherJoe Posts: 19,622 Forumite
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    What keep pedalling said, I'm in the process of selling some shares with about. £40k gain so I'm splitting over several years. You've only got a week or so to do the first half so better get a move on !

    (As I should have done a few years back )
  • Pincher
    Pincher Posts: 6,552 Forumite
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    CGT allowance

    2016/17 £11,100
    2017/18 £11,300

    If it was me, I would sell up to the £11,100 limit, not half.

    Note that you can sell other shares, at a loss, to offset gains.
    Good time to clear out dead beat shares.
  • Vortigern
    Vortigern Posts: 3,247 Forumite
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    cashbackproblems wrote: »
    ok thanks, the main thing is whether its an ISA or Non-ISA is you only pay tax if you declare it to HMRC.
    Are you considering trying to conceal your gain from HMRC? :(

    That's tax evasion and is not what I suggested.
  • cloud_dog
    cloud_dog Posts: 6,061 Forumite
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    You can also gift some of the shares to your spouse so as to utilise their CGT allowance. The value / gain will be treated using exactly the same number (purchase price / gain) that you would use.
    Personal Responsibility - Sad but True :D

    Sometimes.... I am like a dog with a bone
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