Declaring Tax on profit from Shares (Please Help)

dc.pecheur

Thank you Lokolo, I much appreciate your time spend answering for my questions.

grizzly1911

dc.pecheur wrote: »

Thank you Lokolo for your clarification on ISA/ CGT.

Sorry keep bothering you with multiple requests.

1 final qn: Please could you say me if I need to declare 50K in 2010 or not?
Or Can I declare altogether 90K in 2012?
(Reason: Money not withdrawn all all money is still in shares account)

Which is correct by law?

AIUI the capital gain should be logged against the year it was made.

If you made a capital gain in 2010 of X. Then providing X>The CGT allowance then it needs to be declared and the tax paid on the difference bewteen X - CGT allowance.

If you reinvested the money in 2010 and mad a further gain of Y in the same tax year then X+Y >CGT allowance then it needs to be declared and the tax paid on the difference between X+Y -CGT allowance.

If the gain at Y had in fact been a loss then this could be offset against the gain of X in the same tax year.

If you fully reinvested your capital and gain X in 2010 and didn't sell until 2012 with a gain of Z.

Then tax would have to be paid, (providing X and Y exceeded the CGT allowance in their respective years) based on the years in which they had been made at the rates/allowances applicable for each.

If you have forgotten to declare a previous gain I would talk to HMRC in the first instance and find out how they want you to proceed rather than cobbling some overall gain together for the current tax year.

The fact the money was still in a share account is irrelevant because you moved to cash and realised your gain.

dc.pecheur

Thank you grizzly for your valuable comment. As I mentioned earlier the above was just an example and those calculations applies for this year which we have enough time to file a tax return if in case we made a profit but we haven't yet as it was just couple of hundreds. But for future investments these informations will be much useful. In case we made a profit we would file the tax without fail. These are some of the vital stuffs that everyone must know before investing hence started exploring. Thank you again for your detailed answer.

jimjames

If you haven't used your ISA allowance then assuming the "we" means two of you then you can get £22k into one now and another £22k in April which would help avoid any CGT issues in future.

CLAPTON

dc.pecheur wrote: »

Example: Bought 20000£ shares in 2010. Sold for 40000£ in 2010. Bought again shares for 40000£ and sold for 80000£ in 2010. So in 2010, invested 20K invested, 80K return, 60K profit. This 80K is invested again in 2010 but sold only in 2012 for 120K.

So do you think I need to declare in 2010 that I got a profit of 50K (60K actually but -10K for CGT) OR can I declare altogether in 2012 that I made profit of 90K (120K final amt - 20K initial investment - 10K CGT). The reason I am asking is I haven't withdrawn the profit it still stays in my shares account.

2nd Qn: Previously I thought this CGT allowance is applicable only to SHARES ISA account. Do you think this CGT will be applicable even if I invested using normal share-dealing account and not through ISA account?

Trying to find out exactly when to declare the tax so that I don't miss any tax declaration.

Thank you all

well may be maybe not

there are rules if you buy, then sell, then buy, the SAME company share within a short time (referred to as bed and breakfast)

so I'm afraid your example is not sufficiently well defined to give an answer

dc.pecheur

Thank you Clapton for introducing to bed and breakfast concept. never came across this rule, even its been mentioned in HMRC. Well, I never sold it partly as its not a huge holding, always sold it everything at one go. But its nice to know, I will have a read through the CG section. Thanks again

Biggles

dc.pecheur wrote: »

Sorry keep bothering you with multiple requests.

1 final qn: Please could you say me if I need to declare 50K in 2010 or not?
Or Can I declare altogether 90K in 2012?
(Reason: Money not withdrawn all all money is still in shares account)

Which is correct by law?

I think the reason you are having to make multiple requests is that you keep giving different 'examples' and don't tell us what the actual figures really are. And when you do quote some rough figures, you still call it an 'example' and only give calendar years of transactions, not actual dates, which doesn't really help.

But as regards your 'final question', you have to declare capital gains in the year in which they are made. It makes no difference at all whether you have withdrawn it from your account or not, as you were told in post #2. Or is this just another 'example'?