Capital gains tax on shares.

pete80

Thanks for that page from the manual Jimmo, I thought there must be some guidance material somewhere.

It is a shame that there is no "definitive checklist" as to what constitutes trading for a living, as in number of transactions per month/annum and perhaps transactional amounts to guide investors/spread betters.

Thanks anyway for your help Sir.

James,_Oxford

I would just like to correct something I raised earlier in this thread.

I raised the possibility that the share dealing could be taxed as trading income (rather than as capital gains). It turns out that share dealing will always be taxed as capital gains tax except where the dealer is a properly registered share dealer. Private individuals who buy and sell shares (irrespective of how regularly) should therefore be within the CGT regime, which has the annual exemption and lower rate advantages. The authority is the case of Salt v Chamberlain.

You learn something every day!

Penelopa.Pitstop

roger_c wrote: »

Just to clarify you are required to report disposals in the year if gains are over the annual exemption (£10,100) or proceeds are above the reporting limit (4 x the annual exemption = £40,400).

What about selling CFD contracts? Do I take the whole value of shares even though I don't really pay that and I don't sell real shares at the end?

Another question relating to CFD. At what point profit is counted to CGT? When I close my CFD position? Because when trading on CFD you can withdraw part of the profits before closing the position.

I'm trying to work out how to avoid CGT and I was thinking about closing the position just before end of tax year and then reopen it again immediately to earn more in future and take profits in next tax year. I also want to use the same method to transfer money to my husbands account and open the positions on his account for the next tax year.

If all goes according to plan I expect profits of around 200-300K in next 2-3 years so I'm not sure I will be able to avoid much CGT even dividing investments and profits between both of us.

Do I need professional advisor or accountant to plan all this?

mymoneyqueestions

Hi,
I am finishing filing my self assessment and I am not sure if I have to fill the capital gains summary. I have sold few shares last year and made a loss for the tax year 08-09.
So I do not need to pay any tax, however I want to be able to offset the losses against the gains I may realise next year.
Do I have to declare the losses in this year self assessment ?
Or can I add them to the 2009-2010 self assessment ?

John_Pierpoint

jimmo wrote: »

　

The question of whether someone is trading or not is one of General Law as opposed to Tax Law and all sorts of lawyers, accountants, taxmen etc have[STRIKE] made a good living [/STRIKE]out of it so we are not going to solve the issue here.
.

Wasted large amounts of the wealth of the nation in the non productive activity of debating the issue?

jibberjabber_4

Can anyone tell me when or how you have to declare your capital gains?

I bought some shares earlier in the year and recntly sold them making a few thousand pounds over the 10K allowance, I know I need to declare this but have no idea what the process is?

Is it my responsibility to alert IR or will my broker do this? If it is my responsibility is there any fixed time limit after the sale in which I need to do it?

Thanks in advance for any help or advice.

James_Trimby

Penelopa.Pitstop wrote: »

What about selling CFD contracts? Do I take the whole value of shares even though I don't really pay that and I don't sell real shares at the end?

Another question relating to CFD. At what point profit is counted to CGT? When I close my CFD position? Because when trading on CFD you can withdraw part of the profits before closing the position.

I'm trying to work out how to avoid CGT and I was thinking about closing the position just before end of tax year and then reopen it again immediately to earn more in future and take profits in next tax year. I also want to use the same method to transfer money to my husbands account and open the positions on his account for the next tax year.

If all goes according to plan I expect profits of around 200-300K in next 2-3 years so I'm not sure I will be able to avoid much CGT even dividing investments and profits between both of us.

Do I need professional advisor or accountant to plan all this?

Hi The profit/loss is taken when you close your position. If you partially close a position then a profit or loss is taken at that time as a % off whole position. IF continuing and as profitable as suggested then doing some trade in Husband's name is good but will only actually save about £1800 per year as the highest rate of CGT is currently 18% There are a few schemes around to reduce this to a fee of about 6% BUT although I offer them, at 18% I would not be too unhappy (last year it would have been as high as 40%)
Re "Bed and Breakfasting" at tax year end the phrase is there as it was very common.. The Revenue have rules in place to help stop this now. OFf top of head you will need to be out of the trade for about a month to get the effect you want. OR use husband/wife holding to avoid this (ie you sell A and husband sells B you buy B and husband buys A)

On an aside (and I am no expert in this) have you considered using spread betting for some of these trades (very similar in concept( as far as I am aware)) and in the UK completely tax free (as considered gambling!)
If you start to make the profits you hope I would consider getting a professional to help with your return but if you keep all the paper work and get a system together to document everthing shouldnt be too difficult to do one self. Good Luck!

mymoneyqueestions

jibberjabber wrote: »

Can anyone tell me when or how you have to declare your capital gains?

I bought some shares earlier in the year and recntly sold them making a few thousand pounds over the 10K allowance, I know I need to declare this but have no idea what the process is?

Is it my responsibility to alert IR or will my broker do this? If it is my responsibility is there any fixed time limit after the sale in which I need to do it?

Thanks in advance for any help or advice.

You have to fill in a self assessment and the Capital Gains Summary page. Careful deadline for paper is 31 Oct. Deadline for online filing Jan.