Tax Liability on Investments

[pthedj]

This will probably seem like a daft question to you seasoned investors out there,but I am about to start investing on a small scale to start with & would like to know:

(a) if I have to pay tax on any profits made on selling shares that have risen in value, what happens if I lose money on shares,can future profits be offset against tax on past losses.

(b) at what point to I have to pay my taxes on profits made.If I buy & sell shares numerous times throughout the year from various different companies (make gains on some but losses on others) can I wait until the end of the year before declaring my profits or do I have to declare gains immediately.
(I am a PAYE worker).

 

[CCOVICH]

No daft questions there-have a read of this [broken link removed] and then see if there is more you need to know.

It is good to see someone asking these questions before they invest!

 

[ClubMan]

(a) if I have to pay tax on any profits made on selling shares that have risen in value, what happens if I lose money on shares,can future profits be offset against tax on past losses.

You have it the wrong way around there I think. If you make a loss on selling shares (or any other capital asset) then you can offset those losses against subsequent gains that you may make at any point in the future. You don't pay tax on losses!

(b) at what point to I have to pay my taxes on profits made.If I buy & sell shares numerous times throughout the year from various different companies (make gains on some but losses on others) can I wait until the end of the year before declaring my profits or do I have to declare gains immediately.

Check out the Revenue website for details of the filing and payment deadlines for Capital Gains Tax.

 

[silvamuppet]

(b) at what point to I have to pay my taxes on profits made.If I buy & sell shares numerous times throughout the year from various different companies (make gains on some but losses on others) can I wait until the end of the year before declaring my profits or do I have to declare gains immediately.

This is a tad off topic as I know your question is more angled at the tax end of things which the previous posters have addressed. But if you are only starting out and particularly if you are investing on a small scale you should avoid churning (buying and selling regularly).....Find a stock you are comofortable with and keep it longer term.

You should only really be selling it when you don't see more potential for it (or if you are sure the money could be better used elsewhere). With the regular buying and selling you are eating into your profits with excessive brokerage fees. (you are also potentially speculating on a stock if you don't see yourself holding a share longer than a year which is fine if you know what you are doing but if you dont....)