Two shares, net gain zero, CGT is…?

[SonicHedgeHog]

Like everyone I’m thinking about shares outside my ISA and wondering what to do. If I had two shares whose profit and loss cancelled one another out is there a CGT bill to pay? Would it make any difference if the shares were in the same company but purchased at different times?

[Simpo Two]

SonicHedgeHog said:

Like everyone I’m thinking about shares outside my ISA and wondering what to do. If I had two shares whose profit and loss cancelled one another out is there a CGT bill to pay? Would it make any difference if the shares were in the same company but purchased at different times?

I was doing OK on the first bit (ie 'yes gains can be offset against losses') until I got to the last sentence, whereupon my mental circuit breaker went 'ping'...

[croyde]

You can't claim on a loss, although it would be a much fairer system.

[SonicHedgeHog]

croyde said:

You can't claim on a loss, although it would be a much fairer system.

Are you saying the loss is irrelevant and the tax will be based only on the share which made a profit?

[alscar]

Any CGT calculations will apply over each tax year in aggregate - gains versus losses.
If overall within the allowance ( perhaps shortly to vanish totally ) then no CGT to pay.
If overall the losses outweigh the gains then said nett loss can be carried forward into the next tax year and offset then against overall gains if applicable to then calculate whether any CGT potential remains.

[SonicHedgeHog]

Brilliant. Thank you

[MaxFromage]

Alscar's answer has everything you need to know as long as you don't have any of those company shares left over, as your calculation will not be a simple offset in that case.

[SonicHedgeHog]

Thanks. I’ll keep it as simple as possible. Very useful to be able to use a few duds to offset some real winners.

It’s going to be very interesting to see what the stock market does when we finally find out the changes in the budget.

[Simpo Two]

SonicHedgeHog said:

It’s going to be very interesting to see what the stock market does when we finally find out the changes in the budget.

If it helps, remember that there's much more to 'the markets' than the UK; I doubt that whatever Ms Reeves says will make Jack Schitt difference in any other continent.

[Good Plan Ted]

But surely it’s worth selling up prior to budget and realising any any gains (and losses) then post budget buy back in, as almost certainly cgt is going up.

I don’t think any move including plundering bank/savings/pensions is off the cards for this lot, maybe bitcoin and Swiss francs maybe the future.

[alscar]

Good Plan Ted said:

But surely it’s worth selling up prior to budget and realising any any gains (and losses) then post budget buy back in, as almost certainly cgt is going up.

I don’t think any move including plundering bank/savings/pensions is off the cards for this lot, maybe bitcoin and Swiss francs maybe the future.

Apart from potential complexity and practical issues not even sure Crypto and the like is off the table.
I heard last week that classic car gains was also "briefly" mentioned elsewhere.
Its almost as if RR is enjoying all the angst caused by all the mutterings.
KS's latest definition of the working man just says it all in terms of anyone that has saved or invested is in their sights.
Sensible perhaps to sort any any Capital Gains up until end of the last tax year as a very minimum and also put money into ISA's for this years allowance now though.

[Simpo Two]

Good Plan Ted said:

But surely it’s worth selling up prior to budget and realising any any gains (and losses) then post budget buy back in, as almost certainly cgt is going up.

That's a point but any twitch won't be because of market concerns, and it will be reinvested. Globally a few Brits selling up for 30 days is a non-event.

I noted some Labour bod on R4 this morning failing to define what 'people who work' mean. He was asked 4-5 times 'Do landlords work?' and dodged it. There does seem to be a view that if you're not an employee on PAYE you don't count.

[Good Plan Ted]

alscar said:

Good Plan Ted said:

But surely it’s worth selling up prior to budget and realising any any gains (and losses) then post budget buy back in, as almost certainly cgt is going up.

I don’t think any move including plundering bank/savings/pensions is off the cards for this lot, maybe bitcoin and Swiss francs maybe the future.

Apart from potential complexity and practical issues not even sure Crypto and the like is off the table.
I heard last week that classic car gains was also "briefly" mentioned elsewhere.
Its almost as if RR is enjoying all the angst caused by all the mutterings.
KS's latest definition of the working man just says it all in terms of anyone that has saved or invested is in their sights.
Sensible perhaps to sort any any Capital Gains up until end of the last tax year as a very minimum and also put money into ISA's for this years allowance now though.

Two tier said tax rises for those who own shares and assets, saying they do not fit his definition of
"working people" so in future don’t work and just rely on the state…no wonder the country’s going to be fekked.

[Mr Whippy]

Simpo Two said:

SonicHedgeHog said:

It’s going to be very interesting to see what the stock market does when we finally find out the changes in the budget.

If it helps, remember that there's much more to 'the markets' than the UK; I doubt that whatever Ms Reeves says will make Jack Schitt difference in any other continent.

Yes but a few days after our budget is the USA election.

Lined up perfectly to give everyone cover if the budget goes down like a turd.

[OutInTheShed]

alscar said:

Apart from potential complexity and practical issues not even sure Crypto and the like is off the table.
I heard last week that classic car gains was also "briefly" mentioned elsewhere.
Its almost as if RR is enjoying all the angst caused by all the mutterings.
KS's latest definition of the working man just says it all in terms of anyone that has saved or invested is in their sights.
Sensible perhaps to sort any any Capital Gains up until end of the last tax year as a very minimum and also put money into ISA's for this years allowance now though.

Some years ago, I wished that yachts were assessable for CGT, as the loss I made on mine would have come in handy to offset against the profit on some shares.

[Panamax]

SonicHedgeHog said:

Brilliant. Thank you

One point to add - if the total proceeds of sale exceed £50,000 you need to complete a comprehensive CGT return setting out all of your gains and losses and submit it to HMRC. Yes, even if there's no tax payable.

[alscar]

OutInTheShed said:

alscar said:

Apart from potential complexity and practical issues not even sure Crypto and the like is off the table.
I heard last week that classic car gains was also "briefly" mentioned elsewhere.
Its almost as if RR is enjoying all the angst caused by all the mutterings.
KS's latest definition of the working man just says it all in terms of anyone that has saved or invested is in their sights.
Sensible perhaps to sort any any Capital Gains up until end of the last tax year as a very minimum and also put money into ISA's for this years allowance now though.

Some years ago, I wished that yachts were assessable for CGT, as the loss I made on mine would have come in handy to offset against the profit on some shares.

I think Labour are only interested in taxing gains on "wasting assets " and not about allowing running costs or depreciation.
Would no doubt be the same should CGT ever get applied to Primary houses.

[Good Plan Ted]

Mr Whippy said:

Simpo Two said:

SonicHedgeHog said:

It’s going to be very interesting to see what the stock market does when we finally find out the changes in the budget.

If it helps, remember that there's much more to 'the markets' than the UK; I doubt that whatever Ms Reeves says will make Jack Schitt difference in any other continent.

Yes but a few days after our budget is the USA election.

Lined up perfectly to give everyone cover if the budget goes down like a turd.

Ultimately it could be a calamitous week for the financial markets with a possible double whammy especially if it’s a dead heat in the states with potentially lots of arguments.

It’s a case of realise shares/funds now or grit your teeth.

[ClaphamGT3]

alscar said:

Any CGT calculations will apply over each tax year in aggregate - gains versus losses.
If overall within the allowance ( perhaps shortly to vanish totally ) then no CGT to pay.
If overall the losses outweigh the gains then said nett loss can be carried forward into the next tax year and offset then against overall gains if applicable to then calculate whether any CGT potential remains.

This is, currently, the right answer. Capital losses can be carried forward indefinitely to be offset against capital gains.

That the shares are in the same company and acquired at different times is irrelevant. A good example of this is the individual who is granted shares as part of a long term incentive plan. If shares granted one year lose value (or fail to vest) then that loss can be offset by the capital gain made on shares that have been granted, vested and generated a capital gain in subsequent years.

[Panamax]

You might own three shares in one company,
One share bought for £1 in 2010
One share bought for £2 in 2015
One share bought for £3 in 2020

What you own is a "pool" of three shares each with a base value (cost) for CGT purposes of £2

You can't pick and choose which specific share you are going to sell in order to finesse your CGT position.

(Note: If you have owned shares for a very long time the rules may be different and can be quite complicated.)