No Capital Gains Allowance

pmjenkins

I heard on MoneyBox Live yesterday that the £10,900 capital gains tax allowance may not be applicable to someone who has no other source of income other than share trading. Can anyone confirm this and / or point me in the direction of the HMRC rules?

vectistim

If it's trading it becomes your business and so income tax

Biggles

During the dot-com boom, I remember several theoretical discussions on whether it would be better to claim you were a trader and pay income tax (instead of CGT, which was then 40%, I believe), as well as claim expenses in self-employment.

When it came down to it, nobody ever knew of any private investor traders who had actually been registered by HMRC.

I suspect it's still totally theoretical, plus there are fewer benefits these days due to the changes in tax rates.

pmjenkins

So if I make about half a dozen disposals a year realising a total gain of less than £10,000 would you say that I have nothing to worry about i.e. I should benefit from the £10,900 CGT allowance?

grizzly1911

If it is personal investment funds and you are liquidating gains, with full documentation, then I expect to follow that principle.

I am not accountant or HMRC officer so happy to be corrected.

Biggles

pmjenkins wrote: »

So if I make about half a dozen disposals a year realising a total gain of less than £10,000 would you say that I have nothing to worry about i.e. I should benefit from the £10,900 CGT allowance?

Of course, that's what it's for. Bear in mind that if the actual disposal proceeds total more than £43,600 you'll still need to report them to HMRC, though.

westy22

Biggles wrote: »

Of course, that's what it's for. Bear in mind that if the actual disposal proceeds total more than £43,600 you'll still need to report them to HMRC, though.

Unless those disposals were within a tax wrapper i.e. a SIPP or S&S ISA in which case they need not be reported.

Glen_Clark

Biggles wrote: »

During the dot-com boom, I remember several theoretical discussions on whether it would be better to claim you were a trader and pay income tax (instead of CGT, which was then 40%, I believe), as well as claim expenses in self-employment.

When it came down to it, nobody ever knew of any private investor traders who had actually been registered by HMRC.

I suspect it's still totally theoretical, plus there are fewer benefits these days due to the changes in tax rates.

I remember the dot com bubble too, when 'sensible' people were giving up sensible jobs to play share traders with their life savings. We all know what happened next.
Threads like this suggest to me the next crash can't be far away.