Is CGT allowance harvesting to benefit from €1270 worthwhile and what is the easiest way to do it?

Younginvestor93

Registered User
Messages
131
For a couple it can be double this which is nice.

Curious what is the easiest way to do this, if anyone does this?

Some ideas I have currently have.
1) It may naturally occur if you are somewhat active in buying and trading stocks.
2) If you work in a company and they give you shares,it is easy just sell shares each year but not more than the allowance to avoid tax.
3) If you invest in some long term investments like an Investment Trust or a solid long term stock. You can sell just enough of the stock each year so it is tax free. You can't bed and breakfast so either wait the month of invest the money back in to a second similar stock or trust all the while reducing your eventual tax bill.

Is it worthwhile doing? Who does it and how do you do it?
 

Marc

Registered User
Messages
1,327
All financial planning involves weighing a series of trade-offs

In principle the CGT exemption looks attractive for smaller accounts but these tend to be hit disproportionately by fixed trading costs.


Our analysis indicates that picking up the annual capital gains tax exemption is ultimately more
valuable for small accounts but is not insignificant even at the €500,000 level assuming you can make the round trip trade cost effectively.

5330



Marc Westlake CFP®, TEP, APFS, EFP ,QFA
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AND REGISTERED TRUST & ESTATE PRACTITIONER
Managing Director

sOFJlSaNLC2W1RSaPPpSf3gIgim7S2tpFxEzgJH4FXSsXEfIP3kW80zAHbBl0DWArrxNJDMM_DaPv-x_QCoDvWp2P8-b28Bvyy5bHIEoBzTobNvzRrRilcD7rkYy2A_OB6WpAZOD6KsZ7PsY2In4pzQUkRNk50myUTPWw1w4GiZOx4pN2ezSjEtg3IqLr7ry9n7AbsTSyeCz1b8=s0-d-e1-ft


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SPC100

Registered User
Messages
857
That seems to imply it is worth about 16000 Euro over twenty years.

I guess that is excluding any compounding on the saved tax?

Is that just the NPV of 1270 a year over the next twenty years?
 

_OkGo_

Registered User
Messages
221
All financial planning involves weighing a series of trade-offs

In principle the CGT exemption looks attractive for smaller accounts but these tend to be hit disproportionately by fixed trading costs.


Our analysis indicates that picking up the annual capital gains tax exemption is ultimately more
valuable for small accounts but is not insignificant even at the €500,000 level assuming you can make the round trip trade cost effectively.

View attachment 5330


Marc Westlake CFP®, TEP, APFS, EFP ,QFA
CHARTERED, CERTIFIED & EUROPEAN FINANCIAL PLANNER™ professional
AND REGISTERED TRUST & ESTATE PRACTITIONER
Managing Director

sOFJlSaNLC2W1RSaPPpSf3gIgim7S2tpFxEzgJH4FXSsXEfIP3kW80zAHbBl0DWArrxNJDMM_DaPv-x_QCoDvWp2P8-b28Bvyy5bHIEoBzTobNvzRrRilcD7rkYy2A_OB6WpAZOD6KsZ7PsY2In4pzQUkRNk50myUTPWw1w4GiZOx4pN2ezSjEtg3IqLr7ry9n7AbsTSyeCz1b8=s0-d-e1-ft


Chartered Financial Planners

www.globalwealth.ie

It is not at all clear what that graph is actually indicating or how you are calculting or compounding the cgt exemption. The reality is that a smaller portfolio is unlikely to have consistent gains year on year to take advantage of the cgt exemption
 

OMG_OMG

Registered User
Messages
83
Do you not just sell enough shares in December to make a profit of €1270 x 2 for a couple.
And then use the total sum you got from the sale to buy more shares.
So you still end up with the same amount invested, but a reduced tax liability on any gains for the future.
 

MugsGame

Frequent Poser
Messages
2,618
Do you not just sell enough shares in December to make a profit of €1270 x 2 for a couple.
And then use the total sum you got from the sale to buy more shares.
So you still end up with the same amount invested, but a reduced tax liability on any gains for the future.
Yes.

Note that any unused CGT losses (from disposals within the same or previous tax years) must be used up before the annual CGT allowance can be applied.
 
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