Capital gains tax question

dickyseville

Hi,
Just wondering if someone can help me with a CGT question.
I am not in the higher tax earning bracket and have no other shares than the ones I'm going to talk about.

In 2011 a SAYE scheme matured so I started selling some shares. In total I put in £9000 over 3 years for the shares. I got 22674 shares at a price of 18.5p each. My trades are as follows:
20/10/11 - Sold £9,999.54 (12673 @ 79p ISA trading account)
19/10/11 - Sold £9,999.82 (13013 @ 77p normal trading account)
30/05/12 - Sold £10,600.70 (12479 @ 85p normal trading account)
14/03/13 - Sold £1613.87 (1319 @ £1.23p ISA trading account)

My dividends have been:
25/11/11 - £75.50
20/07/12 - £202.81
30/11/12 - £30.52

I now have 10401 shares left (lost a few during bed and ISA) with a value today of £12866.04.

I know I'm allowed to sell about £10,000 a year but am really confused about when / how much I can sell of the initial investment etc.
The shares have suddenly shot up today and I'd really like to sell. How much can I sell without having to pay CGT?

Please help.

2poor4this

I'm no expert in this, and would be interested to hear other peoples answers but as far as I'm aware you only pay CGT on the profit portion of the shares.
So you're allowed to make £10,000 ish profit before CGT comes into play.

Could someone please clrarify or confirm this

dickyseville

Yes you do only CGT on the profit, however I do recall someone saying once that it wasn't as simple as just selling all your initial investment in one bulk then selling all your profit up to the CGT limit. I'm sure someone said for every share you sell you have to work out how much is profit and how much is initial investment. This is where it gets complicated!

2poor4this

Yes I thought it was something like that, do you have to provide a breakdown for every sale? if your total trade was below the CGT threshold and you had no other assets which may have incurred CGT would they expect you to provide the full detalis?

Cocobay71

Hi,

Wonder if anyone could help with my question.

We live in a house, our main residence and have a flat that we used to live in before moving into the house which we now rent out. We want to sell the flat in about four years time, what if any capital gains tax will we need to pay please. This sale would leave us with only the main residence we are living in.

dickyseville

If a CGT expert could help me with my issue before Cocobay71 please it would be appreciated as it was my thread and I currently have my finger over the sell button on my trading account, but don't know what to do!!!

Linton

I assume the shares you have left (10401) are not in an ISA. If they were there would be no tax to pay.

If I understand your numbers correctly......

You have sold 12479 this tax year at a profit of 0.85-0.183=£0.667 per share. So the profit on these is £8323.

That gives you 10600-8323=£2277 allowance remaining. The shares you sold in an ISA dont count.

The shares you sell now would be at a profit of 1.23-0.185=£1.045 per share. So you can sell 2277/1.045=2179 shares without exceeding the limit.

Actually its more than that if you take dealing costs into account.

Linton

My calculations assume that you didnt bed &ISA this tax year. If you did then you will have to deduct the profit you made from that transaction before working out the number of shares you can sell now.

dickyseville

That's great. Many thanks for your help.

Richie(UK)

Cocobay71 wrote: »

... We live in a house, our main residence and have a flat that we used to live in before moving into the house which we now rent out. We want to sell the flat in about four years time, what if any capital gains tax will we need to pay please. This sale would leave us with only the main residence we are living in.

As you may be aware, CGT is not payable in respect of your main home. For the period of time that the flat was your main residence there will not, therefore, be a CGT charge. Keep in mind that the final 36 months of ownership will also qualify. More guidance may be found here: http://www.hmrc.gov.uk/cgt/property/sell-own-home.htm#4

DRS1

I was trying to work out how you acquired 22 thousand shares and then sold at least 25 thousand. Did you by any chance reinvest the dividends?