Capital Gains on Shares, when left in broker account.

J

jcount

Registered User
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Hi,

A simple query on capital gains.

If I have an account with a stock broker and i sell some shared in company A and make a gain. Are the following point true.

1). At this stage the money site in the broker account, so i presume I do not have to pay any capital gains.

2). If i now buy shares in a new company B and make a loss.

3). Now i get fed up with the stock exchange and cash in my balance. Now i pay capital gains if appropriate. I presume I can now offset the loss at 2 against the gain at 1?

Thanks and Regards,
 
jcount said:
Hi,

A simple query on capital gains.

If I have an account with a stock broker and i sell some shared in company A and make a gain. Are the following point true.

1). At this stage the money site in the broker account, so i presume I do not have to pay any capital gains.

2). If i now buy shares in a new company B and make a loss.

3). Now i get fed up with the stock exchange and cash in my balance. Now i pay capital gains if appropriate. I presume I can now offset the loss at 2 against the gain at 1?

Thanks and Regards,
Click to expand...

Where you leave the proceeds of the sale is not relevant.

If you make a gain you may have to pay CGT, subject to the normal reliefs, allowances, etc.

You can offset a capital loss against a capital gain.
 
Let's take this case.

1). I buy 5000 shares in company A at €1.

2). The shares spike to €2, and i sell all 5000 for $10,000 euro.

3). 2 days later the shares drop to €1 and I buy 10000.

4). 2 years later the shares rise to 1.2 and I sell all 10000 for €12,000.

5). I close my account and get cheque for 12,000 euro.

or

1). as above

2). as above

3). as above

4). 2 years later the shares fall to 20p and I sell 10000 for €2,000

5). I close my account and get a cheque for 2,000 euro.

What tax payment should i need to make in the 2 cases above?
 
or is there not a period of time in which you can avoid having to pay capital gains by re-investing?
 
jcount said:
Let's take this case.

1). I buy 5000 shares in company A at €1.

2). The shares spike to €2, and i sell all 5000 for $10,000 euro.

3). 2 days later the shares drop to €1 and I buy 10000.

4). 2 years later the shares rise to 1.2 and I sell all 10000 for €12,000.

5). I close my account and get cheque for 12,000 euro.

What tax payment should i need to make in the 2 cases above?
Click to expand...

Personal allowance is ignored in all cases:

1) No tax payable

2) CGT payable of €5,000 @ 25% = €1,250 (NB - 4 week rule doesn't apply because a profit has been made on the disposal)

3) No tax payable

4) CGT payable of €2,000 @ 25% = €500

5) No tax payable



jcount said:
Let's take this case.
1). as above

2). as above

3). as above

4). 2 years later the shares fall to 20p and I sell 10000 for €2,000

5). I close my account and get a cheque for 2,000 euro.

What tax payment should i need to make in the 2 cases above?
Click to expand...

1) as above

2) as above

3) as above

4) no tax payable

5) no tax payable

You have a CGT loss of €8,000 to carry forward against future capital gains
 
jcount said:
Let's take this case.

1). I buy 5000 shares in company A at €1.
Click to expand...
no tax to pay

2). The shares spike to €2, and i sell all 5000 for $10,000 euro.
Click to expand...
Pay CGT on your gain of €5,000 (25% of the gain less your personal exemption).
3). 2 days later the shares drop to €1 and I buy 10000.
Click to expand...
no tax
4). 2 years later the shares rise to 1.2 and I sell all 10000 for €12,000.
Click to expand...
pay cgt at 25% on your gain of €6,000 (less your personal exemption).
5). I close my account and get cheque for 12,000 euro.
Click to expand...
no tax

or

1). as above

2). as above

3). as above

4). 2 years later the shares fall to 20p and I sell 10000 for €2,000
Click to expand...
no tax but you realise a loss which can be used against future gains.
5). I close my account and get a cheque for 2,000 euro.
Click to expand...
no tax

What tax payment should i need to make in the 2 cases above?[/QUOTE]
 
First case

1)
2) CGT is due on gain of €5,000 - payment is due in Dec or Jan depending on date of sale.
3)
4) CGT is due on gain of €2,000
5) has no effect on CGT


1)
2) CGT is due on gain of €5,000 less CGT allowance of €1,270 - payment is due in Dec or Jan depending on date of sale.
3)
4) CGT credit of €2,000 loss is available to offset agains any gains in the same year or can be carried forward to offset future gains.
5) has no effect on CGT
 
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