Buying shares in unwrapped account?

BrockStoker

I'm considering buying shares of a company in my unwrapped share dealing account since they are ineligible for my wrapped account (not to mention I'm also fully subscribed for this tax year).

Can someone please remind me of the implications?

I guess I can buy, let them sit there, and not have to do anything until I want to withdraw? Only then (if/when I withdraw) I would have to pay CGT?

ColdIron

Dividends are taxable annually. You may need to file a Self Assessment or otherwise inform HMRC. You should get a Consolidated Tax Certificate annually detailing dividends, PIDs etc. No CGT until you dispose of them and your gain may be within the £12,300 Annual Exempt Amount. Some platforms charge less (if anything at all) to hold them than in wrapped accounts. Keep good records

BrockStoker

Thanks ColdIron.

This stock does not pay a dividend. I just want to let it sit there and not mess with it, so I won't have to do anything in relation to self assessment I guess?

bowlhead99

BrockStoker said:

Thanks ColdIron.

This stock does not pay a dividend. I just want to let it sit there and not mess with it, so I won't have to do anything in relation to self assessment I guess?

If you haven't disposed of any stock and it hasn't paid any income then you have not made any capital gains or losses, so there's nothing to tell HMRC. When you do eventually sell it you will have to have records telling you how much you paid for it, so you can figure out if you have anything to report when you sell it. Depending on the overall value sold within any one tax year and whether or not you are required to do a self-assessment for any other reason, you may still need to disclose the sales and provide a calculation of the capital gain on the disposal(s) even if you don't have more gain than your annual exemption.  

But sounds like it will be a problem for a future year if you are not going to make any disposals this year.

BrockStoker

Thanks for the clarification bowlhead.

So if I decide to sell some at a later date, and buy another stock with the proceeds within the account, I will need to keep records of all of that too?

AnotherJoe

Only if you make a gain of more than £12.3k OR you sell more that 4x that.

The account itself ought to keep the records anyway, pretty cockamamie broker if they dont let you access buy and sell dates, prices etc.

BrockStoker

AnotherJoe said:

Only if you make a gain of more than £12.3k OR you sell more that 4x that.

Thanks AnotherJoe.

Thrugelmir

Keep a spreadsheet. Or run the portfolio live through a fantasy portfolio such as is available on the London Stock Exchange website. You can track realised gains/losses easily. 

BrockStoker

Thrugelmir said:

Keep a spreadsheet. Or run the portfolio live through a fantasy portfolio such as is available on the London Stock Exchange website. You can track realised gains/losses easily. 

Thanks for the tips Thurgelmir. I still have yet to figure out spreadsheets, but I always make a record in txt file, and track my stocks through Yahoo Finance (this time making backups as I go!).

Apodemus

Your original post  mentions "my unwrapped share dealing account", implying that you may already hold other unwrapped investments. So just in case it's not clear from the above comments, be aware that the £12,300 gain mentioned above in respect of CGT liability would include any other gains realised on other unwrapped investments in that year, not just the individual shares that you are considering.  

BrockStoker

Apodemus said:

Your original post  mentions "my unwrapped share dealing account", implying that you may already hold other unwrapped investments. So just in case it's not clear from the above comments, be aware that the £12,300 gain mentioned above in respect of CGT liability would include any other gains realised on other unwrapped investments in that year, not just the individual shares that you are considering.  

Thanks for pointing that out Apodemus. That is the only unwrapped investment account I currently hold. Trying hard to keep things as simple as possible, but in this case I could not resist as the stock was screaming "bargain".

If anyone is interested the stock is Orchard Therapeutics (ORTX). I managed to snag 500 @ $4.33. I have enough dry powder for another 500 if the price dips again (fingers crossed).