Any way of 'avoiding' or 'reducing' CGT made on AIM shares

longwalks1

Is there a legal (to stop all the PC brigade gunning me down) way to get around paying CGT on profit made on shares in AIM? Was planning a shares ISA but now know it cant be used with AIM shares, are there any other ways? Any at all?

Cheers in advance

xrjtg

Crystallising your profits each year to use your CGT allowance is one obvious one. Otherwise, without sheltering them in some other wrapper (not something I'm competent to comment on), I think you'd have to pay the tax. You won't like to hear it, but sharing your investment returns with the rest of us is precisely how CGT is supposed to function.

debbie42

A few obvious ones:
spread selling of profitable shares over tax years
offset with losses
share assets with a spouse to utilize their CGT allowance (you can get over 20K each year this way, before being liable for tax).

longwalks1

debbie42 wrote: »

A few obvious ones:
spread selling of profitable shares over tax years
offset with losses
share assets with a spouse to utilize their CGT allowance (you can get over 20K each year this way, before being liable for tax).

Debbie

My spouse, is just my live in girlfriend, would that be classed as my spouse? And I already own the shares, but i'm guessing they can be transferred over to her? (once I've made clear their value, and the fact any funny business and she's under the patio)

WHITEVANMAN

britishboy wrote: »

Is there a legal (to stop all the PC brigade gunning me down) way to get around paying CGT on profit made on shares in AIM? Was planning a shares ISA but now know it cant be used with AIM shares, are there any other ways? Any at all?

Cheers in advance

Sorry there is no legal way to get around paying CGT on any profit you have already released over the CGT limit. (im not PC! I hate taxes, but hate people who would look to defraud the rest of us by evading payment.)

Legal ways to avoid paying CGT.

A shares ISA can be used with a few AIM shares providing they are listed on 2 exchanges.

You could always sell a bit this tax year and crystalise your tax free allowance of £10,100 (profit) without paying anything then sell some more next year and make use of next years allowance.

For shares you havent bought yet, try spread betting on the shares instead, no Stamp Duty and no CGT payable on profits.
(Be aware of the potential of greater losses though)

longwalks1

xrjtg wrote: »

Crystallising your profits each year to use your CGT allowance is one obvious one. Otherwise, without sheltering them in some other wrapper (not something I'm competent to comment on), I think you'd have to pay the tax. You won't like to hear it, but sharing your investment returns with the rest of us is precisely how CGT is supposed to function.

Crystallising? Sorry, new to shares Have briefly looked into an ISA but I cant put AIM shares into ISA's apparently

I know i'm supposed to share my CGT with you all, and of Britains population you guys (and girls) in this sub-forum are the ones i'd least complain about sharing with, but seeing as I give £800+ away every month to fund every Jeremy Kyle contestants wardrobe from JJB Sports, I'm trying to limit being shafted even more for it to be flushed down the political bog

longwalks1

Cheers whitevanman (love the name by the way - why cant we share trade 'cash in hand guv'nor to avoid the dreaded tax)

cool, didnt know about if an AIM was on 2 exchanges, hows the easiest way to find this out please?
Was thinking of timing my sells just before 5th april, and just after to make use of next years allowance so glad thats an option

Not looked into spread betting at all yet I'm afraid, no idea why not, will read up on it and see how i get on

Thanks again

WHITEVANMAN

britishboy wrote: »

Cheers whitevanman (love the name by the way - why cant we share trade 'cash in hand guv'nor to avoid the dreaded tax)

cool, didnt know about if an AIM was on 2 exchanges, hows the easiest way to find this out please?
Was thinking of timing my sells just before 5th april, and just after to make use of next years allowance so glad thats an option

Not looked into spread betting at all yet I'm afraid, no idea why not, will read up on it and see how i get on

Thanks again

list of dual listed aims at barclays stockbroker.

http://www.stockbrokers.barclays.co.uk/?category=whatweoffer&usecase=landing86

Providing your Aim shares dont go down before april, it would be best to split, you can sell enough of your shares to cover all of your initial investment value plus £10100 profit this year, and the rest would need to be carried over to next tax year.

If they start dropping though you may be prudent to sell the lot and just take the Tax hit, AIMs can be very risky.

debbie42

britishboy wrote: »

Debbie

My spouse, is just my live in girlfriend, would that be classed as my spouse? And I already own the shares, but i'm guessing they can be transferred over to her? (once I've made clear their value, and the fact any funny business and she's under the patio)

It has to be a spouse (i.e. wife) or "civil partner". Getting married just to avoid CGT might be a tad extreme

jimjames

debbie42 wrote: »

It has to be a spouse (i.e. wife) or "civil partner". Getting married just to avoid CGT might be a tad extreme

Agreed!

Paying CGT on a good profit is surely better than not making that profit at all. After all its only 18% of the gain above £10k unless you're a higher rate taxpayer.

xrjtg

CGT is only paid on the difference between the purchase and the sale price. In particular, if you never sell then you never pay any CGT. So for "paper" profits to be set against your allowance for some year, a sale needs to be made; this crystallises the gain.

If you didn't really want to sell the shares, then you'll need to buy them back. But precisely to stop you using this trick to lower your CGT bill, there's a rule that says, roughly speaking, that unless you wait 30 days then HMRC will pretend that you never sold them at all, and you won't have achieved anything. This of course introduces the risk that the share price rises between the sell-off and re-purchase, but there's a trick to get round this: when you make the sale, you open a spread bet at the same time. If prices rise then you win the bet and use the winnings to buy back your (now more expensive) shares. If they fall then you lose on the bet, but you can buy them back for less than you sold them for. In either case you should neither lose nor make money over the 30 days. It cannot be emphasised enough that you should not attempt this unless you know exactly what you're doing, so do some thorough research if this is something that would interest you.