Share Dealing Discussion Area

Biggles

Just_landed wrote: »

Given up looking cannot find it, at above what figure you have to notify HMRC even if you made a loss on selling shares IE the last I remember it was about £44000 would somebody give me a lead as to where to find the figure ?
Ta

It's four times the annual CGT exempt amount, so this tax year it's £43,600.

merlin777

isn't this just for trusts?

Biggles

It's for all disposals http://www.hmrc.gov.uk/cgt/intro/report-gain.htm#2

Nick_C

Nick_C wrote: »

My mid January, my capital gains for this tax year had reached £10,560 on 10 shares that I bought for £34K (and sold for £44k).

I'm currently avoiding selling any more shares until after 6 April.

Its a nice problem to have, but I'm going to fully use my ISA allowance now, and transfer shares across from my main portfolio to my S&S ISA each year.

Don't know why I didn't think of this before. All my shareholdings are in my name. If I open a new (Halifax) Share Dealing Account in joint names with my Civil Partner and transfer all my (non ISA) shares across, does this mean that we will effectively have a £22K CGT threshold in the new tax year? i.e. When we sell shares, any capital gain is split evenly between us?

Halifax tell me there is no charge for this. Are there any drawbacks that I have not thought about? Is it ok to fund my share account from - and still have dividends paid into - my current account, or should I set up a joint account for them as well?

We are both BR tax payers, and the additional income that my OH will get through dividends will not take him into the higher rate.

(I realise this won't help me in the current tax year, as I've already maxed out on shares sold that were solely in my name.)

We currently don't have any joint accounts, and I'm only mid 50s so I don't expect to die soon, but I like the idea of putting assets into joint accounts anyway, as it will make things easier for him if/when I die.

merlin777

Biggles wrote: »

It's for all disposals http://www.hmrc.gov.uk/cgt/intro/report-gain.htm#2

So for CGT purposes you need to do a tax return if you have netted more than the 10,600 threshold but also if the value of shares you sold in the year were worth 42,400, regardless of how much profit you had from them?

Nick_C

merlin777 wrote: »

So for CGT purposes you need to do a tax return if you have netted more than the 10,600 threshold but also if the value of shares you sold in the year were worth 42,400, regardless of how much profit you had from them?

That's not my reading of it.

You have a duty to calculate whether or not you are liable to pay any CGT. If you are liable, you must complete a (self-assessment) tax return.

If, for reasons other than having to pay CGT, you are required to complete a tax return, then if you have calculated that you have no CGT to pay, you don't need to complete the Capital Gains part of the return - unless you have sold shares with value of more than 4 times the CGT threshold, in which case you must complete the CG page.

If you have no other reason to complete a tax return, then selling shares with a value of more than 4 times the CGT threshold is not relevant. You don't need to complete a return.

EdGasket

So how would you pay the CGT if you don't complete a return and let HMRC know about it?

merlin777

Nick_C wrote: »

That's not my reading of it.

You have a duty to calculate whether or not you are liable to pay any CGT. If you are liable, you must complete a (self-assessment) tax return.

If, for reasons other than having to pay CGT, you are required to complete a tax return, then if you have calculated that you have no CGT to pay, you don't need to complete the Capital Gains part of the return - unless you have sold shares with value of more than 4 times the CGT threshold, in which case you must complete the CG page.

If you have no other reason to complete a tax return, then selling shares with a value of more than 4 times the CGT threshold is not relevant. You don't need to complete a return.

Do you know what the 4x rule is all about then? I can't see under what circumstances it would apply because if you earn over the threshold you add it to your return and if not, you don't. The only thing I could think of is that they want to know if you are selling a load of shares, even if you're losing on them.

Nick_C

Person A has simple tax affairs and doesn't normally have to fill in a tax return. He buys £10K of shares and sells them in the same tax year for £20K. He calculates his capital gain as being £10K, which is below the threshold, so he doesn't need to make a return.

Person B is self employed, so he has to complete a return. He also bought £10K of shares which he sold in the same year for £20K. He has made no other Capital Gains that year. He doesn't need to complete the Capital Gains page of the return.

Person C is self employed so he has to complete a return. He bought £40K of shares which he sold in the same year for £50K. He has made no other Capital Gains that year. Although he calculates that he owes no CGT, he must complete the CG page of the return.

Person D has simple tax affairs and doesn't normally have to fill in a tax return. He bought £40K of shares which he sold in the same year for £50K. He has made no other Capital Gains that year. He calculates that he owes no CGT, so he does not need to make a return.

In other words:-

1) If CGT is due, you must complete a return and fill in the CG page.

2) If CGT is not due, and you don't need to do a return for any other reason, then you don't need to make a return.

3) If you are person who has to make a return each year (such as the self employed), then

(a) if you are due to pay CGT, or if you have disposed of capital for more than 4 times the allowance (the Annual Exempt Amount), you must complete the CGT page.
(b) if you made a CG of less than the allowance, and your disposals were less than 4 times the allowance, then you don't need to complete the CGT page.

At least that's my understanding!

merlin777

Thanks for making that clear, Nick.

Do know if the reason you do a tax return is relevant? In my case I don't have to do one but I have requested it because my financial situation has varied wildly in the last 4 years.