Selling shares - taxes to pay if reinvest into property?

sarah_0901

Hi all,

About 7 years ago I bought shares (paid £60K) and now they are worth around £300K. If I sell them and buy an investment property would I have to pay capital gains or any other taxes? Thanks for your time

CLAPTON

yes you will pay capital gains tax on the profit less your cgt allowance

gadgetmind

You have a capital gain tax problem, I'm afraid.

You have £240k of gain in there, which will be taxed at 0% for the first £10,600, 18% for anything additional that doesn't take you into the higher rate tax bracket (it "stacks" in top of other income), and 28% for everything else.

If you'd after on or before April 5th, you could have used your 0% and 18% bands from last year, but that chance has gone.

You can also gift shares to a spouse so they can use their 0% and 18% bands, which would have let you get £42,400 out tax free by now if you'd also used last years allowance. The best you can do now is to use your CGT allowances this year and then again on April 6th 2013.

Perhaps you can use your allowances now for deposit and take out a mortgage that doesn't penalise early repayments?

You can also look at EIS and SEIS but I doubt this applies to you.

sarah_0901

Hi Gadgetmind,

Thanks very much for the info. What if I had lived abroad for the past 12 months?

Aegis

sarah_0901 wrote: »

Hi Gadgetmind,

Thanks very much for the info. What if I had lived abroad for the past 12 months?

You'd still be liable, as any gains made while abroad are chargeable to UK CGT on your return if your total non-residency is less than 5 tax years.

gadgetmind

CGT is a nasty little tax, and it's easy for things to get out of control. One way to help keep it in check if to use your CGT allowances every year, which is part of why I've always preferred shares to big illiquid things such as property.