Question on CGT & sale of shares

pb3

Hi everyone,

Hope this is the correct forum for my query and if so I hope someone can advise.

First I haven't filled in a tax return for years. Over a decade ago the Inland Revenue (as they called themselves at the time) sent me a letter stating that due to the simplicity of my affairs I no longer needed to send in a tax return unless my circumstances changed.

My circumstances haven't changed - I'm still working for the same company

Anyway I've sold sme shares and realised a profit of around £600.

My limited understanding is that you are allowed around 9K (I think) of Capital gains per tax year before CGT is payable?

If so do I need to fill in a Tax return even though I'm well within the CGT threshod?

Clarification appreciated.

CLAPTON

how much was the total sale worth?

holly_hobby

Hi,

The current annual CGT personal allowance is £10,600 (2012/13).

If your total chargeable gains for the yr (in this case 6 April 2012- 5 April 2013), are below the annual personal allowance, then HMRC have no requirement for you to contact them - however do please retain all records associated with the pch and disposal (inc proof of any assocaited costs which have been offset) for any future HMRC inspection.

If this is the only CGT liable sale you have for this tax yr, and with only a net profit of £600 (assume £600 quoted is net of all permitted associated pch and disposal costs), then this is obv well within your current annual £10,600 allowance.

Following which you will have the residual balance of £10k of unused allowance available until 5 April 2013 - after which you get a brand new personal annual allowance of £10,600 - which as I say runs from 6 April 2013/5 April 2014. (NB - you are unable to carry forward any unused CGT personal allowance to further yrs, although previously reported CGT losses may be offset on a carry forward basis).

Hope this helps explain the process ... and why you (if this is your only sale exposed to a CGT on gains), why in this case there is no liability and that HMRC accordingly don't require it reporting.

Holly

Davide123

holly_hobby wrote: »

Hi,

The current annual CGT personal allowance is £10,600 (2012/13).

If your total chargeable gains for the yr (in this case 6 April 2012- 5 April 2013), are below the annual personal allowance, then HMRC have no requirement for you to contact them - however do please retain all records associated with the pch and disposal (inc proof of any assocaited costs which have been offset) for any future HMRC inspection.

If this is the only CGT liable sale you have for this tax yr, and with only a net profit of £600 (assume £600 quoted is net of all permitted associated pch and disposal costs), then this is obv well within your current annual £10,600 allowance.

Following which you will have the residual balance of £10k of unused allowance available until 5 April 2013 - after which you get a brand new personal annual allowance of £10,600 - which as I say runs from 6 April 2013/5 April 2014. (NB - you are unable to carry forward any unused CGT personal allowance to further yrs, although previously reported CGT losses may be offset on a carry forward basis).

Hope this helps explain the process ... and why you (if this is your only sale exposed to a CGT on gains), why in this case there is no liability and that HMRC accordingly don't require it reporting.

Holly

Unless the gross proceeds x 4 annual exemptions, then it does need to be reported on tax return.

holly_hobby

Davide123 wrote: »

Unless the gross proceeds x 4 annual exemptions, then it does need to be reported on tax return.

Thanks Davide.

My understanding is that this only applies if the indvidual already reports via SA, and the disposal proceeds exceed 4 x annual exemption ie. £42,400 for 12/13 (aka 4 x £10,600).

But if the individual isn't reqd to report via SA (which I think is the OPs case from reading) , then there is no necessity to report the disposal(s), if their total gain(s) are within their annual exemption limit regardless.

V happy to be corrected if this isn't the case, and reporting is indeed reqd right across the board (ie for both current SA and non-SA peeps), if as we say the total asset disposal receipts do exceed 4 x annual CGT exemption for the yr in question.

I'll have a hunt about on HMRC site/ref notes, but could you confirm if this the case from your own experience ?

Many thanks

Holly x

madgagoo

holly_hobby wrote: »

Thanks Davide.

My understanding is that this only applies if the indvidual already reports via SA, and the disposal proceeds exceed 4 x annual exemption ie. £42,400 for 12/13 (aka 4 x £10,600).

But if the individual isn't reqd to report via SA (which I think is the OPs case from reading) , then there is no necessity to report the disposal(s), if their total gain(s) are within their annual exemption limit regardless.

V happy to be corrected if this isn't the case, and reporting is indeed reqd right across the board (ie for both current SA and non-SA peeps), if as we say the total asset disposal receipts do exceed 4 x annual CGT exemption for the yr in question.

I'll have a hunt about on HMRC site/ref notes, but could you confirm if this the case from your own experience ?

Many thanks

Holly x

I agree. Sales > 4 x exemption only need to be reported if the individual is already in SA.

If the person is not in SA then only chargeable gains (i.e. in excess of AE) need to be reported to HMRC.

Davide123

holly_hobby wrote: »

Thanks Davide.

My understanding is that this only applies if the indvidual already reports via SA, and the disposal proceeds exceed 4 x annual exemption ie. £42,400 for 12/13 (aka 4 x £10,600).

But if the individual isn't reqd to report via SA (which I think is the OPs case from reading) , then there is no necessity to report the disposal(s), if their total gain(s) are within their annual exemption limit regardless.

V happy to be corrected if this isn't the case, and reporting is indeed reqd right across the board (ie for both current SA and non-SA peeps), if as we say the total asset disposal receipts do exceed 4 x annual CGT exemption for the yr in question.

I'll have a hunt about on HMRC site/ref notes, but could you confirm if this the case from your own experience ?

Many thanks

Holly x

Not sure i can see any rule whereby dont have to report if in SA/not in.

But, if not in SA & gain doesn't generate tax liability, then there wont be any penalty for non-submission/late filing, as there wont be any tax due to generate a % penalty.

madgagoo

Davide123 wrote: »

Not sure i can see any rule whereby dont have to report if in SA/not in.

But, if not in SA & gain doesn't generate tax liability, then there wont be any penalty for non-submission/late filing, as there wont be any tax due to generate a % penalty.

From: http://www.hmrc.gov.uk/cgt/intro/report-gain.htm


How to report a sale, disposal or gain
If you don't normally complete a tax return
If you have worked out you have no Capital Gains Tax to pay, you don't need to give HMRC details of your gains or disposals.

holly_hobby

Davide123 wrote: »

Not sure i can see any rule whereby dont have to report if in SA/not in.

But, if not in SA & gain doesn't generate tax liability, then there wont be any penalty for non-submission/late filing, as there wont be any tax due to generate a % penalty.

Sorry Davide, my mistake .... from your post I thought you were a accountant ...... and I did start to wonder from what you had said, if I was going mad !! Thank goodness I can put the straight jacket back away for now !!

Anyhoo, back to the plot .....

The OP isn't SA, so as the chargeable gain is within their current (assuming at this point unsed) annual CGT allowance - there is no liability OR requirement to report to HMRC - which hopefully answers their original Q's.

Many thanks also to the lovely Madgagoo, for confirming reporting requirements and also digging out the HMRC regs for illustration .

Hope this helps OP

Holly x

pb3

Thanks to the forum for the replies to my query. The £600 figure I mentioned is net and the gross value of the shares sold is certainy a fraction of 4 x annual exemption