Bank Shares

stavross192

Happy New Year Money Savers!

Can I have people's opinions on bank shares, long term value, dividends and tax etc.

I have this thought that since the markets crashed, now is the best time to pick up shares for pennies which in the past would have cost pounds.

I bought about 80,000 Rbs when they doffed their cap at 11p.
Currently I am looking at about 40,000 Lloyds at 51p

Firstly my question on tax would jump out, what if any allowance do I have?
Plus when do I have to squeal to the fascist pigs at HMRC?

Can I scarper to Switzerland to avoid tax???

Then further, and I mean much further in the future when dividends come back what are the tax implications on these?

Thanks all!

ses6jwg

You can buy up to £3,600 pounds worth in a self select shares ISA and this is free from capital gains, You can purchase another £5,100 from April.

I am also eyeing up the Black Horse, but I feel that we are overdue a slight pullback in the FTSE in the next 6 months.

Lokolo

If they are outside of ISA you may have to pay Capital Gains tax at 18% depending on your profit made from the shares.

No you can't scarpar to switzerland....

And you pay it when you sell.

noh

Lokolo wrote: »

If they are outside of ISA you may have to pay Capital Gains tax at 18% depending on your profit made from the shares.

No you can't scarpar to switzerland....

And you pay it when you sell.

There is an annual CGT allowance, £10100 this year. Gains above this are taxed at 18%.

http://www.hmrc.gov.uk/cgt/shares/basics.htm

stavross192

Thanks for the reply s so far guys. How does it work for monies earned from dividends?

Lokolo

stavross192 wrote: »

Thanks for the reply s so far guys. How does it work for monies earned from dividends?

Dividends are automatically taxed at 10%. If you are a higher tax payer you will need to pay 32.5%. (this will be part of tax return I assume)

ses6jwg

It is ridiculous you still pay tax on dividends from shares within an ISA.

Theft.

stavross192

Your dam right it's theft! Typical Government, where's the incentive to work hard only to be hammered in the pocket!

Rant over.

I have been having a look at banking abroad i.e Switzerland, according to their info I can avoid tax if I am buying shares through the bank over there, their charges are a percentage commission, .75% is one figure I have been given.

Since the Swiss are very secretive about their clients what is stopping me from flying over to one of these banks with cash in hand, open an account, buy shares through that bank and sit back waiting on a dividend?

Point to note for any tax inspector here I have not done this, all is hypothetical.
Which for the time being is still legal, well for the time being I wouldn't put it past a certain political party to try and lock us up....

Aegis

stavross192 wrote: »

Your dam right it's theft! Typical Government, where's the incentive to work hard only to be hammered in the pocket!

Rant over.

I have been having a look at banking abroad i.e Switzerland, according to their info I can avoid tax if I am buying shares through the bank over there, their charges are a percentage commission, .75% is one figure I have been given.

Since the Swiss are very secretive about their clients what is stopping me from flying over to one of these banks with cash in hand, open an account, buy shares through that bank and sit back waiting on a dividend?

Point to note for any tax inspector here I have not done this, all is hypothetical.
Which for the time being is still legal, well for the time being I wouldn't put it past a certain political party to try and lock us up....

What's stopping you is the fact that it's tax evasion. If the Swiss start sharing details with the UK and you get discovered as a tax evader, large fines wait for you.

ViolaLass

ses6jwg wrote: »

It is ridiculous you still pay tax on dividends from shares within an ISA.

Can someone tell me if I've got this right? You pay 10% tax on the dividend and are given a tax credit, which then comes off any tax you have to pay from, say, your job. What if you don't earn enough money to pay tax that year, can you roll the credits over? Does being self employed make any difference? (I ask because there's a good chance I won't earn enough to pay tax next year but I will have dividends within an ISA)

ses6jwg

I didnt know anything about a tax credit, but then again I am under 25 so qualify for sweet FA