Share sales and CGT periods

dub_nerd

Frequent Poster
Messages
1,968
On Revenue Form 11 you have to declare capital gains on disposals in two separate periods -- from January to November, and December separately. There are different deadline dates for remitting the tax due for each period.

If you sell shares on a number of different dates, do you have to account for them within the appropriate period, or can you sum them all up to a single amount?

If you plan to sell a loss-making share to match any gains so that there is no tax due, do you have to do this separately in each period? Otherwise could you be penalised by Revenue for not remitting tax for the first period by the due date, even though you have no overall liability for the year?
 

jpd

Frequent Poster
Messages
1,723
Yes, you could be penalised for not paying the CGT due in first period. But it's unlikely. On the other hand, if you are planning to sell at a loss in December to offset gains made in Jan-Nov, why not sell on 30th Nov and be done with it. It can hardly make much difference.
 

dub_nerd

Frequent Poster
Messages
1,968
Yes, you could be penalised for not paying the CGT due in first period. But it's unlikely. On the other hand, if you are planning to sell at a loss in December to offset gains made in Jan-Nov, why not sell on 30th Nov and be done with it. It can hardly make much difference.
It forces me to close out positions earlier than I might otherwise, and thus gives me less flexibility.
 

Gordon Gekko

Frequent Poster
Messages
3,685
I've argued this point with Revenue before. My view is that if you know you will realise sufficient losses in December, you don't pay CGT for January-November. It's patently ridiculous to have to pay CGT that won't arise.
 
Last edited:
J

Jon Stark

Guest
I've argued this point with Revenue before. My view is that if you know you will realise sufficient losses in December, you don't pay CGT for January-November. It's patently ridiculous to have to pay CGT that doesn't arise.
Did you win the argument?
 

dub_nerd

Frequent Poster
Messages
1,968
I've argued this point with Revenue before. My view is that if you know you will realise sufficient losses in December, you don't pay CGT for January-November. It's patently ridiculous to have to pay CGT that won't arise.
Did you still have to declare the gain in the two periods, and then argue with Revenue when they try to impose a penalty? It would be a pain to have to have the same argument every year.
 

Gordon Gekko

Frequent Poster
Messages
3,685
Sorry, I'm referring to a situation where you make a gain of €10k in November, make a loss of €10k in December, and you pay no tax.
 

dub_nerd

Frequent Poster
Messages
1,968
Sorry, I'm referring to a situation where you make a gain of €10k in November, make a loss of €10k in December, and you pay no tax.
Yes, me too. When you submit your Form 11 the following year, it explicitly asks about gains in Jan-Nov and Dec separately. So Revenue can see if you made a gain in November -- I presume that's so they can check that you remitted the CGT by the appropriate deadline. If you didn't -- even though your net gain for the year was zero -- what will they do? Can they still penalise you even if you owe them nothing, because you didn't submit a payment and then claim it back.
 

Branz

Frequent Poster
Messages
855
Did you still have to declare the gain in the two periods, and then argue with Revenue when they try to impose a penalty? It would be a pain to have to have the same argument every year.
It depends on the amounts and the attitude of the appropriate revenue official.
The law is very clear and if you find the process a pain, then create the losses and carry them.
 

dub_nerd

Frequent Poster
Messages
1,968
It depends on the amounts and the attitude of the appropriate revenue official.
The law is very clear and if you find the process a pain, then create the losses and carry them.
If "it depends" then obviously the law is not very clear, at least not in its application.
 

Branz

Frequent Poster
Messages
855
If "it depends" then obviously the law is not very clear, at least not in its application.
That may be the case in practice but if you ever p$$ them off everything gets looked at.

You cannot justify, in terms of tax law, your argument.
In fact planning a loss to cover a gain is tax avoidance so I would tread rather carefully.

What you are saying is that you don't like the way its done as it means you have to "close out" positions earlier so they can ......
 

dub_nerd

Frequent Poster
Messages
1,968
That may be the case in practice but if you ever p$$ them off everything gets looked at.

You cannot justify, in terms of tax law, your argument.
In fact planning a loss to cover a gain is tax avoidance so I would tread rather carefully.

What you are saying is that you don't like the way its done as it means you have to "close out" positions earlier so they can ......
Ah here, this is getting too weird.

First of all, I'm not "planning a loss". I've already made the loss. Even if I did plan it, it's none of Revenue's business, any more than if I decided to buy AIB shares at a stupid price because I like the colour of their logo.

And I'm not trying to justify any argument. At the very worst, all I have to do is send Revenue the money in December, then claim it back in January. (I always do my tax returns in January, being ultra-squeaky clean on tax compliance to the point of obsession).

All I'm trying to do is save both Revenue and myself a pair of pointless transactions. But I'd prefer not to incur a late payment penalty for my attempts.
 
Last edited:
J

Jon Stark

Guest
You cannot justify, in terms of tax law, your argument.
Are you familiar with the relevant section of the tax legislation?

It's section 959AQ TCA 1997 and reads as follows:
"(1) Capital gains tax payable by a chargeable person for a tax year is, where an assessment has not been made on or by the chargeable person for the tax year, due and payable-

(a) as respects tax payable for the initial period, on or before 15 December in the tax year, and

(b) as respects tax payable for the later period, on or before 31 January in the next following tax year.

(2) Where the capital gains tax payable by a chargeable person for a tax year is due and payable in accordance with subsection (1), then the tax specified in any subsequent assessment made on or by the chargeable person for that year shall be deemed to have been due and payable-

(a) on or before 15 December in the tax year, as respects tax payable for the initial period, and

(b) on or before 31 January in the next following tax year, as respects tax payable for the later period."

If you look at the mechanics of how tax is assessed / self assessed, and the definitions in section 959AQ of "tax chargeable" and "tax payable" you cannot have "tax payable" until you have "tax chargeable", and the chargeable period is the calendar year. Therefore it is entirely open to a person to not pay CGT on a disposal made in the initial period, if they know they will have losses in the later period that will mean the "tax chargeable" on assessment will be nil.

In fact planning a loss to cover a gain is tax avoidance so I would tread rather carefully.
It may be tax avoidance, but it is entirely legitimate tax avoidance!
 

dub_nerd

Frequent Poster
Messages
1,968
If you look at the mechanics of how tax is assessed / self assessed, and the definitions in section 959AQ of "tax chargeable" and "tax payable" you cannot have "tax payable" until you have "tax chargeable", and the chargeable period is the calendar year. Therefore it is entirely open to a person to not pay CGT on a disposal made in the initial period, if they know they will have losses in the later period that will mean the "tax chargeable" on assessment will be nil.
Thank you Jon Stark, that makes total sense. The telling bit for me is:

Where the capital gains tax... for a tax year is due and payable...then the tax specified in any subsequent assessment... shall be deemed to have been due and payable... for the initial period [or] the later period.
The tense used certainly appears to imply that the tax is assessed on the whole calendar year and only retrospectively deemed to have been due in the initial or later period if there was any tax due for the year. Otherwise there is no tax "due and payable" so the question of when it was due never even arises. Looks pretty rock solid to me and is what I plan to go with.

Thanks to everyone else who answered also.
 
Last edited:

dub_nerd

Frequent Poster
Messages
1,968
On Revenue Form 11 you have to declare capital gains on disposals in two separate periods -- from January to November, and December separately. There are different deadline dates for remitting the tax due for each period...

If you plan to sell a loss-making share to match any gains so that there is no tax due, do you have to do this separately in each period? Otherwise could you be penalised by Revenue for not remitting tax for the first period by the due date, even though you have no overall liability for the year?
I'm happy from the rest of this thread that you don't have to remit CGT on gains in the period to November if you plan to make a corresponding loss in December. I've just been doing a dry run of this year's tax return and I also now realise that in this situation you don't have to account for them separately either. On the capital gains part of Form 11 you first account for your total net gains for the year. Then in two subsequent sections you are asked to apportion your net chargeable gains to the two periods (pre and post November). If your net gains are zero you just fill in zero for both these sections, so there's no question of any objections from Revenue.
 
Top