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

longwalks1

xrjtg wrote: »

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.

Ooooh it does interest me, and I certainly will research it thoroughly...... xrjtg, i'm afraid you now have a new bestest friend

longwalks1

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

I wouldnt get married to avoid a pasting from the !!!!! haha, so a few pounds to big brother wont kill me, although we all want to save as much as we can

longwalks1

jimjames wrote: »

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.

jim
If i am a higher rate tax payer, what does it go up to then? (I am seated in preparation)

WHITEVANMAN

britishboy wrote: »

jim
If i am a higher rate tax payer, what does it go up to then? (I am seated in preparation)

28% on any profits realised over £10100.

olbas_oil

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

If you have sold already, and made the gain in this year then it's too late to think about transfer to spouse. (If you're just sitting on a paper profit- then you've not made a gain at all)

1) Sell other shares that would realise a loss - it is the total gains-total losses in the tax year,less the CGT allowance, that you pay tax on.
2) If you are still looking at a large gain, you might like to consider cgt deferral via an EIS scheme. I'm looking at Guiness Renewable Energy, who are planning to put up these solar panels and claim the guaranteed tariff... I like the business plan- but I think the charges are a bit steep.

The EIS scheme allows you to defer gains- the original gain will come back into play in the year when you dispose of the EIS asset (though any gain on the EIS asset itself is free of CGT). But by then you may have other losses, unused exemptions, or another hare-brained EIS scheme to go for!

... oh and third strategy is to pay maxiimum into a SIPP. That reduces income tax, but then CGT starts at the top rate of income tax, amd you might get all your CGT back within the 18% band.

Mikeyorks

jimjames wrote: »

Agreed!

After all its only 18% of the gain above £10k unless you're a higher rate taxpayer.

Bearing in mind that - since June - the net (CGT) gain is added to your other (IT) taxable income for the year. And you pay 18% on any slack there may be to the limit of the 20% basic tax rate ..... and 28% on the residue.

cloud_dog

WHITEVANMAN wrote: »

list of dual listed aims at barclays stockbroker.

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

Just to re-emphasise the dual listing this link to the HMRC Gov website provides the definitive list of 'recognised' exchanges.

You also need to bear in mind that you may actually need to 'argue' with your broker to add a stock to their own ISA list. Sometimes they will err on the side of caution and may not allow a stock in a S&S ISA even though it meets the 'recognised' exchange criteria.

mr_fishbulb

There's an article on the Motley Fool here - http://www.fool.co.uk/Your-Money/guides/Capital-Gains-Tax-Minimising-CGT.aspx

hbakhshi

If you hold 5% of the company's shares for a year, you only pay 10%