Capital gain tax on stocks and shares

thenewcomer

Hi all. 
I want to confirm that my understanding is correct.
1. Capital gains tax on S&S is net gains (and not disregarding the losses)?
2. Deadline for self assessment has passed (31st Jan). How do I inform HMRC of my capital gains from S&S in Feb and March?
3. For those of you who have to pay CGT on S&S, any advice on doing so? Do you keep a list of all your trades with the transaction/ commission fees on excel sheet and submit to HMRC when you do self-assessment?

I am rather anxious as I have never had to fill in an SA for S&S. All help is much appreciated.
Thank you.

eskbanker

If you don't already self-assess, then you can simply report CGT-qualifying gains using the dedicated service for doing so:

https://www.gov.uk/report-and-pay-your-capital-gains-tax/if-you-have-other-capital-gains-to-report

masonic

The deadline has passed for the 2023/24 tax year. Gains made since April 2024 would not be included in that tax year and will need to be included in this coming year's self assessment, or reported through the real time reporting service. You would need to keep your own detailed records to be able to calculate your own gains. HMRC expect you to provide a figure supported by calculations. If you've made disposals at a loss during the tax year. then they can be offset against gains. Losses can also be carried forward from previous tax years. Suggest you have a read of the following: https://www.gov.uk/capital-gains-tax

EthicsGradient

Capital losses can be offset against capital gains. Potentially a loss can be carried forward from one tax year to the next, but this can get  complicated. It is simpler within one tax year.

31st Jan 2025 was the SA deadline for tax in the year 23-24. Gains/losses you make this Feb or March can be reported in self-assessment up to Jan 31st 2026.

Yes, I keep a spreadsheet, and submit a PDF of it (online, or printed). The SA guides do give a sample page you can use, but it's for a simple "one acquistion cost, one sale" asset, which stocks and shares (could be multiple purchases combined together) may not be.

Reporting could be a bit more complicated this year, because of the change in the tax rate in the Budget - we'll have to wait and see how they want the before and after figures reported.

thenewcomer

thank you, all. That is reassuring that the self assessment on CGT is ' a year behind' (Self assessment for CGT gains after April 2024 will be due on 31 Jan 2026). I will keep a neat record of my transactions. Do I need to keep a record of Forex exchange rate, commissions/ transaction fees? 

More queries (please pardon me, I am really trying to learn and will read up on gov.uk website too).
1. Are options trading gains considered capital gains or income? (I wonder about which tax bracket it falls under)
2. Can I offset my S&S capital gains with my P2P losses?

masonic

HMRC publishes a set of exchange rates and it would be sensible to use these where required. Transaction fees that are exclusively related to the purchase or sale can be deducted from your gain.

Options trading may be subject to CGT, but it depends on the instruments used and whether HMRC would regard you doing this as a profession. It's generally not asked about much due to the fact the vast majority lose enough not to worry about CGT.

P2P bad debt relief can only be offset against P2P income, and only where the investment was a qualifying Article 36H agreement.

poolboy

Yes you can offset losses against gains in the same tax year.  As said, keep your calculations in case of query.

GeoffTF

masonic said:

Options trading may be subject to CGT, but it depends on the instruments used and whether HMRC would regard you doing this as a profession. It's generally not asked about much due to the fact the vast majority lose enough not to worry about CGT.

For clarity, unsheltered options trading is subject to CGT, unless you are a professional trader. In theory, options can be sheltered in a SIPP. I made a lot of money trading options, but that was a long time ago. I do not recommend it.

masonic

GeoffTF said:

masonic said:

Options trading may be subject to CGT, but it depends on the instruments used and whether HMRC would regard you doing this as a profession. It's generally not asked about much due to the fact the vast majority lose enough not to worry about CGT.

For clarity, unsheltered options trading is subject to CGT, unless you are a professional trader. In theory, options can be sheltered in a SIPP. I made a lot of money trading options, but that was a long time ago. I do not recommend it.

I believe you can take out spread bets on option price movements, in which case the returns would not be subject to CGT.

GeoffTF

masonic said:

GeoffTF said:

masonic said:

Options trading may be subject to CGT, but it depends on the instruments used and whether HMRC would regard you doing this as a profession. It's generally not asked about much due to the fact the vast majority lose enough not to worry about CGT.

For clarity, unsheltered options trading is subject to CGT, unless you are a professional trader. In theory, options can be sheltered in a SIPP. I made a lot of money trading options, but that was a long time ago. I do not recommend it.

I believe you can take out spread bets on option price movements, in which case the returns would not be subject to CGT.

You can certainly place spread bets on some options, but the spreads are wider than in the options market. There is no two way market in spread bets (the price is fixed by the spread betting company), so you may not get fair prices.. If you are selling options, you forgo the return that you would otherwise get on the collateral, but it may be possible to do a special deal if you are a big fish.

thenewcomer

GeoffTF said:

masonic said:

Options trading may be subject to CGT, but it depends on the instruments used and whether HMRC would regard you doing this as a profession. It's generally not asked about much due to the fact the vast majority lose enough not to worry about CGT.

For clarity, unsheltered options trading is subject to CGT, unless you are a professional trader. In theory, options can be sheltered in a SIPP. I made a lot of money trading options, but that was a long time ago. I do not recommend it.

Thank you. I did not know that we can trade options on SIPP.