shares, funds + taxes

mutley74

I have started to make savings of funds and shares outside my ISAs as i had some spare cash.

I dont think i will go over my capital gains allowance of (~£9k??)....

but what factors do i need to consider and what do i need to declare on tax statements - if anything?

(i am investing in Oeics, and 1 new IPO and possibly some AIM stocks soon)

jem16

You need to declare dividends plus tax credit as part of your taxable income. If you are a higher rate taxpayer then 25% extra tax on the dividends will be payable. If you are a basic rate taxpayer but borderline higher rate taxpayer this may take you into higher rate.

CLAPTON

your CGT allowance of 9200 is only relevant for realised gains (i.e. for shares etc that you have sold and made gains of over 9,200 in this year)

cheerfulcat

You also need to declare losses if you wish to set them against future gains.

mutley74

does that mean if i make £9199 (i wish!) from shares capital gains from shares i dont have to declare it? But if i get paid any dividends they have to be declared as income.
so if i invest £1000 in shares and it grows to value of £10199 thats all my profit - tax free!??

thanks i need this clarification as i have started already investing in aim shares and oeics outside my ISA.

jem16

atpug wrote: »

does that mean if i make £9199 (i wish!) from shares capital gains from shares i dont have to declare it? But if i get paid any dividends they have to be declared as income.

Yes dividends have to be declared as income whether they are actually paid out to you as income or remain within your investment and are re-invested.

so if i invest £1000 in shares and it grows to value of £10199 thats all my profit - tax free!??

Yes it is. Remember you actually have to sell the shares to realise the gain.

mutley74

jem16 wrote: »

Yes dividends have to be declared as income whether they are actually paid out to you as income or remain within your investment and are re-invested.

Yes it is. Remember you actually have to sell the shares to realise the gain.

Thanks....just wanted some clarification on the matter....

also means i have to buy the right ones in the first place.....hmmmmmmm!

cheerfulcat

atpug wrote: »

does that mean if i make £9199 (i wish!) from shares capital gains from shares i dont have to declare it? But if i get paid any dividends they have to be declared as income.
so if i invest £1000 in shares and it grows to value of £10199 thats all my profit - tax free!??

As you might have guessed, it's a tiny bit more complicated than that; after you have held the shares for two whole years you start getting taper relief, which reduces the percentage of the gain which is chargeable to CGT; there is a lot of useful information on the HMRC site - look here.

thanks i need this clarification as i have started already investing in aim shares and oeics outside my ISA.

Some AIM shares qualify as business assets and thus enjoy accelerated taper relief, as shown in the link. Unfortunately HMRC refuses steadfastly to provide a list of such shares, or even clear guidance, so it's up to you to determine whether your shares qualify.

mutley74

Cheerfulcat,

There was a list of AIM share classes listed in the last IC. But to be honest i am a momentum trader.....takes guts to be a Buy & Hold with the market we have these days.

thanks.

BTW
This is my 1000th Post!!! Hey Martin, do i get a MSE prize????

cheerfulcat

Not a comprehensive list, sadly, nor an authoritative one...as to trading vs LTB&H, I would class the former as by far the riskier option! But to each his own. Congrats on your 1000 posts...

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