Shares & CGT - newbie advice
Discussion
This is probably really obvious, but...
How do you deal with CGT on shares? For example:
Lets say I make 100 trades over a year, some make profit, some don't. Do i have to track EACH trade and just give it to my accountant at the year end - along with the receipts for each trade?
OR
Do i just tell them - I started with £10K in shares, ended up with £11K at the end of the year? Tax me on 1K profit please.
How do you do it?
How do you deal with CGT on shares? For example:
Lets say I make 100 trades over a year, some make profit, some don't. Do i have to track EACH trade and just give it to my accountant at the year end - along with the receipts for each trade?
OR
Do i just tell them - I started with £10K in shares, ended up with £11K at the end of the year? Tax me on 1K profit please.
How do you do it?
markmakak said:
Lets say I make 100 trades over a year, some make profit, some don't. Do i have to track EACH trade and just give it to my accountant at the year end - along with the receipts for each trade?
This.ETA if you do only make £1k profit you should be exempt from CGT (unless you use annual exemption somewhere else)
Edited by Mx_Stu on Friday 22 October 14:17
The rules for Capital Gains Tax om shares diosposals are some of the most complex in the CGT system. However, if all your capital gains in any one tax year remain below the Capital Gains Tax personal allowance (currently £10,100), no CGT is payable.
If the total proceeeds on capital disposals exceeds over £30,000 in a given year, even if you have not made a taxable gain, you are still obliged to make a return of the Cpaital Gains details to HMRC using the CGT pages of the Self Assessment tax return.
If the total proceeeds on capital disposals exceeds over £30,000 in a given year, even if you have not made a taxable gain, you are still obliged to make a return of the Cpaital Gains details to HMRC using the CGT pages of the Self Assessment tax return.
It's a legal requirement to notify HMRC of such transactions. Failure to Notify of a Chargeable Event is a criminal offence.
Obviously, if you don't mind breaking the law, then you might want to risk not informing them.
HMRC have powers to investigate transactions from different directions. They might, for instance, discover that an individual had failed to notify them of a chargeable gain if they were investigating the asset sale from the vendor's point of view.
Sometimes, these matters are notified to HMRC by third parties i.e. the tax payer has ben "dobbed" by someone with an axe to grind.
Sometimes, the vendor has a legal obligation to notify as well. I had a client who got "done" because he cashed in an insurance policy before its formal maturity date - this is a Chargeable Event and he was liable to CGT on this. He didn't tell me he had cashed in the policy so the figures were not entered on his Self Assessment tax return. A few months later, I was contacted by HMRC to ask if I was aware of any omissions from the return. Of course, I told them I was not aware of any omissions but eventually my client told me of what had happened. He had been given some misleading information by a financial advisor that such transactions were not subject to Capital Gains Tax - so he hadn't bothered telling me about it.
Needless to say, he had to cough up the underpaid tax, plus interest. We were able to persuade HMRC NOT to charge any penalties on the basis that my client had not been acting deliberately to conceal the gain he had made.
Ironically, if he had waited two more years, the gain would have been CGT exempt.
Obviously, if you don't mind breaking the law, then you might want to risk not informing them.
HMRC have powers to investigate transactions from different directions. They might, for instance, discover that an individual had failed to notify them of a chargeable gain if they were investigating the asset sale from the vendor's point of view.
Sometimes, these matters are notified to HMRC by third parties i.e. the tax payer has ben "dobbed" by someone with an axe to grind.
Sometimes, the vendor has a legal obligation to notify as well. I had a client who got "done" because he cashed in an insurance policy before its formal maturity date - this is a Chargeable Event and he was liable to CGT on this. He didn't tell me he had cashed in the policy so the figures were not entered on his Self Assessment tax return. A few months later, I was contacted by HMRC to ask if I was aware of any omissions from the return. Of course, I told them I was not aware of any omissions but eventually my client told me of what had happened. He had been given some misleading information by a financial advisor that such transactions were not subject to Capital Gains Tax - so he hadn't bothered telling me about it.
Needless to say, he had to cough up the underpaid tax, plus interest. We were able to persuade HMRC NOT to charge any penalties on the basis that my client had not been acting deliberately to conceal the gain he had made.
Ironically, if he had waited two more years, the gain would have been CGT exempt.
Edited by Eric Mc on Monday 25th October 16:20
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