How do you minimize CGT on shares?

switch76

Is it correct that the annual tax free allowance can't be carried over to the next year?

If you are a non-tax payer for income tax, do you still pay CGT when selling shares?

What do you do to minimise the amount you pay in Capital Gains Tax on shares? Do you sell your shares every year if you make a profit or does that incur lots of transaction fees and stamp duty?

00ec25

1. Annual allowance is .... annual - you use it or lose it, no carry over

2. CGT is a tax on capital gains, you pay it if your capital gain is > the annual personal allowance. You can pay CGT whilst at the same time paying nil income tax, the two are completely separate. Your income tax status is irrelevant, on the other hand your total income + the gain determines whether you pay the higher rate of CGT @ 28% rather than the standrad rate @ 18%. A non income tax payer will still have to pay CGT if their gain is >10,100 (10/11 rates) and will pay @ 28% if the gain + their other income is above the higher rate income tax threshold

3. you can bed and breakfast shares each year "30 day rule"
you can bed and isa shares each year
you can deal only within an ISA and totally avoid CGT


google the expressions in italics yourself to learn more then post back if you don't understand

Basic arithmetic will tell you if fees + stamp duty makes sense at any one point in time, by how much wil the share have to increase to get back your transaction costs? However, be aware there is an expression " do not let the tax tail wag the profit dog" ie don't sell just because you think its saving you tax, only sell when that is a sensible thing to do in the prevailing market conditions.

switch76

Please confirm if my understanding is correct.

Bed and breakfast means selling a share and buying it back.
The 30 day rule means you can't buy back a share within 30 days otherwise it will not count as a capital gain.
Bed and ISA means selling a share and buying it back within an ISA, which you can do immediately.

If I sell a share, can my relative buy it immediately to avoid the 30 day rule.

Is there any advantage to having my stockbroker do the Bed and ISA for me, or should I just sell the share myself, move the money to an ISA and buy it again.

John_Pierpoint

"Bed and Spouse" still works.
"Bed and SIPP" is a possibility.

Nosht

CGT due on shares only if sold at a profit.

N.