Tax on share profits
Discussion
I know any capital gains from shares are subject to CGT at 10 or 20% but what constitutes a gain?
Example: I buy 3 shares. Sell two at a profit and sell one at a loss in a given tax year.
Is the gain simply the two that made a profit? Or does HMRC look at an individuals total share dealings in the year and the loss is subtracted from the profit to give the gain?
Many tia.
Example: I buy 3 shares. Sell two at a profit and sell one at a loss in a given tax year.
Is the gain simply the two that made a profit? Or does HMRC look at an individuals total share dealings in the year and the loss is subtracted from the profit to give the gain?
Many tia.
There is a reasonably clear guide here https://www.gov.uk/tax-sell-shares/work-out-your-g...
MikeStroud said:
I know any capital gains from shares are subject to CGT at 10 or 20% but what constitutes a gain?
Example: I buy 3 shares. Sell two at a profit and sell one at a loss in a given tax year.
Is the gain simply the two that made a profit?
The loss on the third would be deducted from the gain on the other two.Example: I buy 3 shares. Sell two at a profit and sell one at a loss in a given tax year.
Is the gain simply the two that made a profit?
My god, I'm starting to sound like Eric. Now that is worrying...
Circumstances like these can be a good opportunity to re-base your CGT positions if you have gains and losses which can be netted off.
One thing to watch out for is that if you end up with a net loss to carry forward you need to claim it by filling in a CGT return even though there's no tax to pay.
One thing to watch out for is that if you end up with a net loss to carry forward you need to claim it by filling in a CGT return even though there's no tax to pay.
CGT pages are among the many "bonus" pages that not everyone who's doing a tax return needs to complete.
If someone is usually just PAYE so never does a tax return, then gets some relevant CGT losses, they will need to complete a tax return just to claim and/or carry forward those CGT losses even though they have no tax to pay.
Example 1:
Gains of £14,000
Losses of £3,000
Net gain of £11,000 is within the CGT annual allowance of £12,300 but a return has to be completed because losses are being claimed in order to get within the tax free allowance.
Example 2:
No gains
Losses of £20,000
Clearly no tax to pay and the year's CGT free annual allowance goes unused (lost for ever). There is no compulsory requirement to complete a CGT return. However, a return must be completed if taxpayer wants to carry forward those losses for offsetting against gains in future years.
If someone is usually just PAYE so never does a tax return, then gets some relevant CGT losses, they will need to complete a tax return just to claim and/or carry forward those CGT losses even though they have no tax to pay.
Example 1:
Gains of £14,000
Losses of £3,000
Net gain of £11,000 is within the CGT annual allowance of £12,300 but a return has to be completed because losses are being claimed in order to get within the tax free allowance.
Example 2:
No gains
Losses of £20,000
Clearly no tax to pay and the year's CGT free annual allowance goes unused (lost for ever). There is no compulsory requirement to complete a CGT return. However, a return must be completed if taxpayer wants to carry forward those losses for offsetting against gains in future years.
Simpo Two said:
MikeStroud said:
I know any capital gains from shares are subject to CGT at 10 or 20% but what constitutes a gain?
Example: I buy 3 shares. Sell two at a profit and sell one at a loss in a given tax year.
Is the gain simply the two that made a profit?
The loss on the third would be deducted from the gain on the other two.Example: I buy 3 shares. Sell two at a profit and sell one at a loss in a given tax year.
Is the gain simply the two that made a profit?
My god, I'm starting to sound like Eric. Now that is worrying...
Simpo Two said:
Is that not part of a tax return?
Yes and no.From 6 April 2020, Capital Gains on residential properties are now taxed outside of the Self Assessment system. All other Capital Gains continue to be part of Self Assessment - for the moment.
To make matters even more complex, gains from the disposal of residential properties, whilst initially taxed separately, still need to be incorporated in the relevant Self Assessment return when it is eventually submitted.
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