Do Hargreaves Lansdown prepare tax statements?

blizeH

Hi,

I'm just trying to make preparations for next years self assessment and everything is pretty much covered apart from the shares.

As I understand it, any income from dividends are taxed at the same rate as other income depending on what pay band I'm in, along with savings, but since I have set everything to automatically re-invest I won't have to pay any tax directly on that.

However, capital gains is confusing me a little, let's say hypothetically I sell shares in a company for £20k profit, however, I also sell other shares for a £30k loss. Would I have to pay capital gains tax on the £20k? Or can I offset the £30k loss against that?

I guess I'm wondering if I just need to keep track of all the shares I bought/sold in a year, or just a track of the profit made on each set of shares. Or will Hargreaves Lansdown do this for me?

I'm also hoping to move everything into funds (ie Marlbrough, Cazenove etc) and I'm assuming they act identically to shares for the purposes of tax?

Thank you!

ps. I'm not sure why I'm worrying as right now I'd be happy just to make a profit, let alone even come close to the £10k CGT threshold!

blizeH

Sorry, the above post isn't particularly clear, I'll try to use an example using massively simplified figures and incorrect returns:

2009 - Buy £10k shares in Google
2011 - Buy £30k shares in Apple
2013 - Sell Google shares for £30k
2013 - Sell Apple shares for £10k

Do I pay capital gains tax on the Google shares?

ColdIron

Do Hargreaves Lansdown prepare tax statements?

Yes

If you receive any taxable dividends or interest in the tax year you will find a consolidated tax certificate at the end of your Spring investment report

http://www.hl.co.uk/investment-services/vantage-service/investment-report-faqs

Linton

If both the Google and Apple sales were in the same tax year there would be no tax. Its the net gain in a tax year that is important.

I believe you do need to keep detailed records though you probably wont need to report on them unless you get close to needing to pay CGT.

Info is on the HMRC website.

You are confused on dividends. If you are a standard rate tax payer the 10% tax is considered to have already been paid (even though it wasnt) so you dont pay any extra. A higher rate tax payer has to pay an extra 25%. Whether the dividend is re-invested or not makes no difference.

To avoid the hassle its much easier to use an S&S ISA as you dont pay tax and there is no need to keep records.

Funds are the same as shares for tax purposes.

blizeH

Thank you ColdIron... I looked on that page earlier but couldn't see anything about capital gains unfortunately Only the income from dividends and interest

blizeH

Thank you Linton, that's good to know about the capital gains... that I won't have to keep meticulous records of every single thing I've ever bought and sold, but rather just compile a summary of how much profit (or losses) I've made within that year.

That's great news about dividends too! I'd be very much a 10% rate payer so I guess any return I receive in dividends will be covered already by the sounds of it. I do have an ISA at the moment but unfortunately it's maxed out for this year - I'm hoping that in time however I can move everything from my Fund & Share account into my ISA though.

Linton

blizeH wrote: »

Thank you Linton, that's good to know about the capital gains... that I won't have to keep meticulous records of every single thing I've ever bought and sold, but rather just compile a summary of how much profit (or losses) I've made within that year.
....

The taxman may want to see the detailed records to confirm you arent trying to diddle him. Presumably you could extract them from the H&L transaction data. I cant see it being an issue until you start getting close to paying CGT, but I dont know what info the self-assessment forms asks for having paid no tax for some
years.

grey_gym_sock

HL's annual statement won't include capital gains, just income. you get contract notes from them, and then have to work out the capital gains yourself. (and it's the same with any broker.)

jem16

blizeH wrote: »

That's great news about dividends too! I'd be very much a 10% rate payer so I guess any return I receive in dividends will be covered already by the sounds of it.

What you need to be careful of is that your dividends plus tax credit don't take you into the next tax band as it all counts towards taxable income.

jamesd

blizeH wrote: »

2013 - Sell Google shares for £30k
2013 - Sell Apple shares for £10k

Do I pay capital gains tax on the Google shares?

No, but you're very close to having to file a full CGT return for having proceeds of sale more than four times the £10,600 annual allowance. Then you get to file even if there is no tax liability. Investing within an ISA is the best way I know of to reduce the paperwork.

PippiShortsock

blizeH wrote: »

Thank you Linton, that's good to know about the capital gains... that I won't have to keep meticulous records of every single thing I've ever bought and sold, but rather just compile a summary of how much profit (or losses) I've made within that year.

This reads to me as though you're misunderstanding the period over which the profit/loss applies. Apologies if I've got that wrong. As I understand it, your profit/loss is dependent upon the purchase price of each individual set of shares or units, not their price at the beginning of the particular financial year in which you sell them. Therefore you do need to keep detailed records of how much each purchase cost you, how much dividends that you reinvested were worth, and any additional purchases and sales of a holding, even if you hold them for 60 years.