Buying/Selling Shares and CGT/Income Tax

[mortimer33]

Hi Guys,

At what point does buying / selling shares become share trading for tax purposes?

In 2008, I bought/sold shares in about 20 different companies/efts. I usually only held the shares for days/weeks.. When doing my tax return I declared the money I made as a capital gain. After talking with a friend I was told that what I did was classified as trading so I should have declared this as extra income rather than a capital gain..

If I've made a mistake as my friend suggested, is it possible to amend it now?

Also, in 2009, I only bought/sold shares in 10 companies/efts.. However again I only held onto them for a few days/weeks.. Should these be declared as extra income rather than a capital gain too?

Many Thanks.

 

[T McGibney]

If Revenue aren't unhappy with the treatment of the transactions, I would be inclined to leave well enough alone. The theory behind Capital Gain v Trade is complex and could really only be answered definitively by reference to your specific circumstances but in reality I would expect that most share trading cases would be treated as Capital Gains rather than trading income.

The corollary of this is that Revenue would generally be very reluctant to allow claims for income tax relief in respect of share trading losses, except in very restricted circumstances.

As an aside, I have learned over the years to be very suspicious of 'tax advice' from friends, family and newspaper articles.