Investment came good but a question about capitol gains tax.

jules4485

Hi all, I have some shares that I never expected to return as much as they have so happy to ask this question but didn't think I'd have to. Currently they are worth in the region of 30k. As I understand I can sell about 11.5k out tax free. So how much will I get taxed if I withdraw the rest. Also can I avoid paying the tax if I "gift" the same amount to my wife and she sells them. Can anybody please advise me on this. Thanks

El_Torro

in the tax year 2020 / 2021 you can make a £12,300 capital gain without paying tax on it.

The important thing to remember is that the capital gain is only on the growth of the investments. So if a share was worth £5k when you bought it and you sell it for £10k, then the capital gain is only £5k (£10k minus £5k). 

A quick google tells me that you are able to gift shares to your wife, for the purpose of her selling the shares and using her own Capital Gains Tax allowance. Perhaps someone else will post to detail the potential pitfalls in doing this though.

parking_question_chap

If you think they will hold their value for a few more months you could sell £11,500 now then the rest in the new tax year thus using two years worth of allowance. CGT owed should be less.

Congratulations.

Whats the stock?

EthicsGradient

You can combine both approaches - give some shares to your wife, and she can sell them, treating the cost of them as the price per share you paid. Thus you can both use a £12,300 allowance this tax year. If that isn't enough to cover the full gain, then you can each sell the remainder in the year starting April 6th, when you've both got a new allowance.