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  1. #1

    CGT on Stocks/Shares

    Thank you in advance for all the great work being done here, hopefully there is someone here who can help steer me in the right track.

    I'm a little confused as to how the following scenario works with regards to CGT and using my allowances etc. I'll put a scenario down and would appreciate any help or advice, and would also be interested in what you would do.

    Online brokerage has a total value of 70k, 35k is deposits to the account, the other 35k is gains made on stocks and shares within this account.

    The total account balance of 70k is split between three stocks.

    Now, I know that during this tax year, both myself and my wife (the account is joint) have an CGT allowance of 11,300, so for the both of us 22,600. Obviously the tax year is ending in April, and whilst I know I have left it late, I wanted to get some quick advice, or a starting point on whats best to do. Slightly confused as of the best course of action to follow.

    1) Do I need to sell and withdraw my original investment of 35k prior too withdrawing my 22600 CGT allowance for this year?

    2) Do I need to fill anything else when doing this, or is it a case of, withdraw the sum of 57,600 (35k original deposit and 22600 cgt allowance) to my personal account, and when this is put back into my share account, my new account breakdown will be 57,600 (my deposit) and a new Capital Gain of 12,400?

    3) Ive read online you must wait 30 days before redepositing into an account, is this true? Is there anyway around this such as another account in a sole name and then transferring shares across so I don't miss out on a months trading?

  2. #2
    Fees and commissions, have spent around 250 this year on brokerage fees and currency conversions, does this factor in in anyway?

    I know that some may say go and see an accountant, I'm just wondering if anyone can give me a overview of what they would do, rules regs etc prior to going. Thanks again for all help received!

  3. #3
    A gain is a gain.
    If you have sold something in the current tax year for more than you originally paid for it then you have made a capital gain.
    If your total gains are more that the capital gains allowance for this year (11,300) and/or the total value of what was sold was >=44,400 (this was the amount for 2016-17, I don't know if it changed for 2017-18) then you must declare it to HMRC and pay any CGT due.
    All of the above is valid, even if you do nothing more.

    You can take money out of the account to pay any CGT when it is due (Jan 2019 if you file a tax return online).
    You need to wait 30 days before buying the SAME share when you sell that share to realise a capital gain. This is to stop the previous practice of overnight 'bed and breakfasting' whereby a share could be sold to crystallise the capital gain, reset the 'gain clock' to zero for those shares and carry on.

    You can still 'bed and ISA' or 'bed and SIPP' whereby you sell the share from a taxable account, transfer the funds to an ISA or SIPP and then buy the share back in the ISA/SIPP.

    If you haven't realised(crystallised) any significant gains in this tax year (i.e. to 11,300 per person) they you might want to sell sufficient shares to do so (you cannot carry the CGT allowance forward). Doing it at this time, you might prefer to transfer enough of the proceeds to fund your ISAs for this year if you haven't already done so and/or next year (from 6 April onwards). You don't need to reinvest that money straight away - you could hold it in cash for a while whilst you decide.

  4. #4
    Several of us have described at great length in the last year or so all the details of CGT, when it applies, how you do calculations, etc.

    Why not do a search on this website for "CGT" or "CGT calculations".
    Then read through the whole of each thread.

    When you have done that, ask again if you don't follow our explanations.

    If you intend to make use of your unused CGT allowances for the current tax year, you need to have placed a successful sale order before the effective cut-off date for sales, at 4:30 pm on Thursday 5th April. You will do well to get sales done earlier than that, preferably by a few days earlier, so that your sale prices are not beaten down by the excess of sellers over buyers at that point. Also, there is nothing so panic-inducing as trying to place sale orders in the closing minutes of the tax year's trading period, only to find that you type the wrong figures or the website is slow because of everyone's frantic attempts to trade at the same time.

    I know all this, because one year I tried to place several sale orders after 4:20 p.m. for a client on the last day of the tax year, and we ran out of time to do the last sale! (I vowed never to work on the afternoon of the last day of the tax year again).

  5. #5
    Congratulations on having doubled the value of your investments.

    Your first question shows quite clearly that you are a little muddled in your thinking about your CGTallowance. Read Money Spider's reply carefully.

    Your are not obliged to sell anything. Only if you sell will need to consider your capital gains position. If you want to realise some of the gains you have made and not have to pay capital gains tax and not have to fill in the CGT sheets on your tax forms, you could sell part of your holdings (not all) say 20K on each of your wife's and your own behalf at any time between now and April 5th. Sell enough to have made about 10K profit each. Keep the profit below 11300. If you do not have a stocks and shares ISA in the current tax year, rebuy the shareholding in ISA. (The 30 day rule does not apply if you rebuy in ISA).

    If your current ISA allowance is used up, open a fully funded 20K each S&S ISA on April 6th.. You won't have any cgt worries there. Anyway, that is what I would do in your position.


 

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