Taxes applicable on share dealing

billytruffin

could someone please briefly outline for me the tax I would have to pay apart from stamp duty if I was share dealing out side of an account that had an isa wrapper? Would I be liable to CGT?

TIA

cheerfulcat

Yes, possible CGT and extra tax on any dividends if you pay tax at the higher rate.

benood

You have an annual limit of £8,800 (ish) before you have to pay cgt - ie you pay tax at your highest marginal rate on gains/profits over this amount.

If the shares pay dividends you are liable to pay tax on these - however, if you are a basic rate tax payer they are tax free in your hands (ie tax has been deducted before it gets to you like interest on a bank account.)

cheerfulcat

Oh, and there's the £1 PTM levy on trades over £10,000.

EdInvestor

gains/profits over this amount.

That's realised gains - ie you have to actually sell the shares, not just make profits on paper.

billytruffin

EdInvestor wrote:

That's realised gains - ie you have to actually sell the shares, not just make profits on paper.

So say in theory I invested made a £2000 profit in a non isa account and hadn't sold the shares, I then transfered the holdings into an account with an isa wrapper and sell them I would avoid paying the tax?

billytruffin

cheerfulcat wrote:

Oh, and there's the £1 PTM levy on trades over £10,000.

what does PTM stand for?

billytruffin

benood wrote:

You have an annual limit of £8,800 (ish) before you have to pay cgt - ie you pay tax at your highest marginal rate on gains/profits over this amount.

If the shares pay dividends you are liable to pay tax on these - however, if you are a basic rate tax payer they are tax free in your hands (ie tax has been deducted before it gets to you like interest on a bank account.)

Is this in addition to the 7K isa limit so I could hold 7k in an isa, pay no tax on profits then hold 8K in a non isa and not pay tax on profits. so I would only actually start paying tax at £15k and above??

Biggles

jamesw2000 wrote:

Is this in addition to the 7K isa limit so I could hold 7k in an isa, pay no tax on profits then hold 8K in a non isa and not pay tax on profits. so I would only actually start paying tax at £15k and above??

It's not the amount/value of shares you hold, it's the amount of profit you make in a tax year that CGT is charged on.

So, you can put up to £7,000 a year - every year - into an ISA and it doesn't matter how much profit you make, you will pay no tax.

And, if you buy and sell shares outside an ISA, you will only be liable for CGT if your gains exceed £8,800 in a tax year. So, buy £50,000-worth of shares, sell for £58,799 - pay no tax.

gt94sss2

jamesw2000 wrote:

could someone please briefly outline for me the tax I would have to pay apart from stamp duty if I was share dealing out side of an account that had an isa wrapper? Would I be liable to CGT?

When you buy shares:

- dealing commission
- Stamp Duty
- £1 PTM levy (panel on Takeovers and Mergers levy) on trades over £10,000

When selling shares:

- Dealing commission
- £1 PTM levy on trades over £10,000

While holding shares, additional tax on dividends if a higher rate taxpaper

Capital Gains tax as has been mentioned by others, depending on if your gains/profit exceeds your CGT allowance in a particular tax year.

So say in theory I invested made a £2000 profit in a non isa account and hadn't sold the shares, I then transfered the holdings into an account with an isa wrapper and sell them I would avoid paying the tax?

With very few exceptions, you can't transfer shares you already own into an ISA - you need to sell them and buy them back within the ISA.

Regards
Sunil

cheerfulcat

jamesw2000 wrote:

what does PTM stand for?

Panel on Takeovers and Mergers