Will I have to pay tax on my payout

rincelex

Hi

A company that I have shares in have been sold to another company and they have informed me that it is a complete sell out and I will be given cash for my shares. Do I have to pay tax on this payout?

Thanks for your help

talexuser

Assuming the shares were not in an isa or pension, then yes, if the GAIN, i.e. the difference between the price you paid for them and the price you got for them is more than £11000.

Linton

If the shares arent in an ISA you may have Capital Gains
Tax to pay on your profit since you acquied the shares.. There is an £11100 annual allowance for CGT so if the profit is relatively small there will be no tax to pay.

rincelex

I can't remember exactly but I paid £2,000 something for them and I am getting back £17,000 and something.

How does this work then as I am currently a non tax payer (earn below the personal limit) Can I use my personal allowance against this.

HappyMJ

rincelex wrote: »

I can't remember exactly but I paid £2,000 something for them and I am getting back £17,000 and something.

How does this work then as I am currently a non tax payer (earn below the personal limit) Can I use my personal allowance against this.

Yes you can use your personal allowance against this.

You'll be taxed on the gain of £15,000 you'll get a CGT exemption on £11,100 so pay tax on around £4,000. Your tax rate on the first £10,600 of income is 0% so you'll pay nothing if you have no other income.

AndyT678

HappyMJ wrote: »

Yes you can use your personal allowance against this.

You'll be taxed on the gain of £15,000 you'll get a CGT exemption on £11,100 so pay tax on around £4,000. Your tax rate on the first £10,600 of income is 0% so you'll pay nothing if you have no other income.

I don't think that's right...

https://www.gov.uk/capital-gains-tax/work-out-your-capital-gains-tax-rate

I think you'll pay 18% on the £4,000 capital gain over the CGT exemption.

rincelex

HappyMJ wrote: »

Yes you can use your personal allowance against this.

You'll be taxed on the gain of £15,000 you'll get a CGT exemption on £11,100 so pay tax on around £4,000. Your tax rate on the first £10,600 of income is 0% so you'll pay nothing if you have no other income.

My earnings for the year are approx £5-6,000 so if I can use my personal allowance this added to the £4,000 I may just be under the £10,600 per year.

I do not complete a tax return and never have will I get sent one or do I have to start the process.

le_loup

Capital Gains Tax is separate from Income Tax.
You will have to pay some tax on your gain.

jem16

AndyT678 wrote: »

I think you'll pay 18% on the £4,000 capital gain over the CGT exemption.

Absolutely correct. Tax at 18% is due on the £4,000.

xylophone

How does this work then as I am currently a non tax payer (earn below the personal limit)

You work out how much you need to pay then see

https://www.gov.uk/capital-gains-tax/report-and-pay-capital-gains-tax

gadgetmind

Are you married and has the deal gone through yet? If the answers are "yes" and "no", then you could transfer some shares to spouse, but you'll have to be quick!