shares and income tax

57chevy

My question is about profits from shares affecting income tax. I'm employed earning around 20k per annum after tax. I've been buying and selling shares making a profit of 30k, so after applying the capital gains tax allowance of £9600, I pay cgt at 18% on £20400. What i want to know is do i add this to my yearly income and which figure , pre cgt of 30k or post cgt of £20400? Whichever figure was added it would put me in the higher rate tax bracket, do i have inform my employers when this point is reached so it affects my wage or do i wait till end of tax year and use a self assessment tax form? Hope i've explained it clearly

fengirl_2

In which tax year have you made this £30k gain? If it was in the year ended 5 April 2008, you deduct the 9200 exemption and the tax is charegd at your highest rate - some will be at 22% and some will be at 40%. You will need to self assess for that year and declare the gains. The tax will be payable on 31 Jan 09. You certainly dont tell your employer - none of his business!
The 18% charge on gains applies from 6 April 08 no matter what your other income comes to and there is no 9200 exemption.

CLAPTON

just to add... the CG is considered to be made in the tax year in which you sold the share.

TaxGeek

Fengirl, why do you say there is no exemption post 6 Apr 08? I understood the annual exemption has increased to £9,600 for individuals in 2008/09.

Geoffo_M

57chevy wrote: »

My question is about profits from shares affecting income tax. I'm employed earning around 20k per annum after tax. I've been buying and selling shares making a profit of 30k, so after applying the capital gains tax allowance of £9600, I pay cgt at 18% on £20400. What i want to know is do i add this to my yearly income and which figure , pre cgt of 30k or post cgt of £20400? Whichever figure was added it would put me in the higher rate tax bracket, do i have inform my employers when this point is reached so it affects my wage or do i wait till end of tax year and use a self assessment tax form? Hope i've explained it clearly

Can't help I'm afraid but just wanted to say Well Done. I also buy and sell but can't claim anything like your success. I presume you day trade or have a large portfolio?