Shares

Troy629

I have 27k from shares if I put 20 into an isa, and gift 7 do I need to put this onto my self assessment form

eskbanker

Have you made a capital gain of more than £12,300?  Who would you be gifting the £7K to?

Troy629

No I paid 10,000 and the gift I am thinking of is my father

eskbanker

Troy629 said:

No I paid 10,000 and the gift I am thinking of is my father

I don't understand - if you bought at £10K and sold for £27K then you have realised a capital gain of more than £12,300, assuming the shares weren't held in a tax wrapper, or were they perhaps from a corporate sharesave scheme?  Did you sell over multiple tax years maybe, or all in one go?

My question about gifting was perhaps irrelevant anyway if you've already sold the shares, in that you can mitigate CGT liability by gifting instead of selling, but only if gifting to a spouse or charity: https://www.gov.uk/capital-gains-tax/gifts

MX5huggy

If you paid £10k and they are now worth £27k.
You have made a capital gain of £17k so CGT is due on £4700. Moving them to an ISA or giving them away (either actual shares or the cash from the sale of the shares) is a CGT event. 

You can pay the tax due or could sell some this year and some next so spreading the CGT across 2 tax years. Sell £19060 this year to realise a gain of £12000 on shares that originally cost £7060

Troy629

Yes your right, sorry this is all new to me and I am trying to get my head around it
i wanted to put some into an isa for growth but i would only be allowed to put in 20k and I wanted to gift my father the remainder as he does not have much to live on.
because I have to fill out a self assessment I wasn’t sure what I put on there

eskbanker

Troy629 said:

Yes your right, sorry this is all new to me and I am trying to get my head around it
i wanted to put some into an isa for growth but i would only be allowed to put in 20k and I wanted to gift my father the remainder as he does not have much to live on.
because I have to fill out a self assessment I wasn’t sure what I put on there

There are essentially three completely unrelated transactions here:

1. Selling the shares, for a profit of £17K
2. Paying £20K of the proceeds into an ISA
3. Gifting the other £7K of the proceeds to your father

Only item 1 has any direct relevance to your taxation (although gifts would be considered part of your estate for inheritance tax purposes if you passed away within seven years), and if you've already sold the shares and thereby realised the capital gain, then you have to pay capital gains tax, via your self-assessment - items 2 and 3 don't affect your liability to pay this.

The main info about capital gains tax is published at https://www.gov.uk/capital-gains-tax

The more detailed guidance about declaring it via self-assessment is at https://www.gov.uk/government/publications/self-assessment-capital-gains-summary-sa108

Linton

Troy629 said:

Yes your right, sorry this is all new to me and I am trying to get my head around it
i wanted to put some into an isa for growth but i would only be allowed to put in 20k and I wanted to gift my father the remainder as he does not have much to live on.
because I have to fill out a self assessment I wasn’t sure what I put on there

You could put the rest of the shares into the ISA next year, it's only 6 months away.  The £20K is per tax year, not an absolute limit.

pip895

Even if you have already sold the shares you could still avoid CGT by repurchasing some of them (within 30 days of the sale) and then holding on to them until next tax year.  

Troy629

Thank you everyone for your comments, I really appreciate it, I understand a lot more now, cheers