Capital Gearing Share Discussion Threads

[david77] 14/6/2016 19:16

I think that you could sell £22,000 worth of shares = £11,000 return of capital + £11,000 of gain.

But I am not qualified to give advice. Wait to see what Gengulphus says.

[mrx9000] 14/6/2016 17:53

Ok, thanks but say I have one position bought for £100,000 which has doubled to £200,000. How much of that could I sell before incurring CGT?

Also am I right in saying that these new rates are now in force


so 10% and 20% rates?

[david77] 14/6/2016 17:43

The CGT calculator should now work on stonebanks.co.uk

There are later bits that don't work but there are only there 'cos it doesn't cost me any more if I add bits.

[gengulphus] 14/6/2016 17:10

mrx9000,

If for example I have £100,000 in a trading account (non isa/sipp) and that £100,000 increases to £200,000. I am right in saying that I can take out my initial investment plus the CGT allowance within the tax year e.g. £111,100 (£100,000 initial + £11, 100 CGT allowance) without incurring CGT.

Not in general, but you might be able to in some rare circumstances. It depends on how the individual shareholdings have done: CGT is assessed on realised gains and losses, and all realised gains and losses are calculated on individual shareholdings when you sell them, not on account totals. ("Realised" not in the "understood" sense, but the "made real" sense, i.e. no longer a gain or loss that can only be calculated from what you could sell the shares for, but one that can be calculated from what you have sold the shares for.)

For example, suppose you put £11,100 into each of 9 different shareholdings, leaving £100 change, and those shareholdings have each doubled in price to £22,200 - except that one of them has done slightly better to now be worth £22,300 - so your account is now worth £22,300 + 8*£22,200 + £100 = £200,000. If you sell any one of the £22,200 holdings, that sale will realise a gain of £22,200 - £11,100 = £11,100, using up your entire CGT allowance. If you sell the holding worth £22,300, you will realise a slightly larger gain of £11,200 and so have to pay CGT on it. The most you'll be able to withdraw from the account by selling and withdrawing cash, without incurring CGT, is £22,300, by selling one of the £22,200 holdings and withdrawing the sales proceeds plus the £100 cash left in the account. (Note that for the sake of simplicity, I'm ignoring trading costs in these examples - in reality, they would have to be taken into account as well and would slightly modify the results.)

On the other hand, suppose that you still put £11,100 into each of 9 different shareholdings, leaving £100 change - but seven of them are still only worth £11,100, one is worth £22,200, and the last one is worth £100,000, so your account is worth 7*£11,100 + £22,200 + £100,000 + £100 = £200,000. This time, you can sell all seven of the £11,100 holdings (realising a gain of £0 each time) and the £22,200 holding (realising a gain of £11,100) while staying within the CGT allowance, and so you can potentially withdraw 7*£11,100 + £22,200 + £100 = £100,000 without incurring CGT.

The common feature of those two scenarios is that you're left with a holding or holdings with unrealised gains of £88,900 on them: in the first case, it's eight holdings bought for £11,100 each and now worth £22,200 each except that one is worth £22,300; in the second case, it's a single holding bought for £11,100 and now worth £100,000.

To be able to withdraw £111,100 without incurring CGT from an account worth £200,000, you would have to left with a holding or holdings worth the remaining £88,900, and the unrealised gains on them would still have to total £88,900 - so they would have to have been bought for £0, or at least count as having been bought for £0 for CGT purposes. That can happen - but it does require some rather special circumstances to make it happen, so is pretty unlikely!

Gengulphus

[m_k_hubbert] 14/6/2016 14:43

mrx9000, the gains are incurred when you sell the shares and any CGT due on gains in tax year >£11.1k has to be paid by Jan 31 following end of tax year in which gains were incurred. The matter of whether the funds remain in your trading account or are withdrawn has no impact on the amount of tax due and the date when it has to be paid.

[mrx9000] 14/6/2016 14:36

A capital gains tax question for shares outside isa/sipp.

If for example I have £100,000 in a trading account (non isa/sipp) and that £100,000 increases to £200,000. I am right in saying that I can take out my initial investment plus the CGT allowance within the tax year e.g. £111,100 (£100,000 initial + £11, 100 CGT allowance) without incurring CGT.

[gengulphus] 14/6/2016 12:58

Investoree - no apologies needed, as IMHO you weren't disruptive, sarcastic or offensive. I just foresaw the possibility that people might respond in a way that would be more disruptive than necessary, so acted to (hopefully!) head that possibility off.

Gengulphus

[investoree] 13/6/2016 19:30

Gengulphus - please accept my apologies for any disruption I have caused to your excellent thread. I appreciate the time you and others take to provide advice and assistance to those of us that are less knowledgeable and need guidance. Should you feel that my post was sarcastic or dismissive in any way I can only apologize once again as that was not what my ramblings intended. Kind regards IE

[david77] 13/6/2016 19:22

sleveen - soon - I hope tomorrow

[sleveen] 13/6/2016 11:58

david

thanks for your post 901, I tried to get on to stonebanks yesterday and it was "server not found"

[gengulphus] 13/6/2016 07:34

Investoree - I agree with much of what you say (and all or almost all of the rest is just stuff I cannot either agree or disagree on, due to lack of relevant experience). My own pet hate is dated letters from HMRC that arrive weeks after the date they say they were sent - which happens far too frequently compared with anyone else who writes to me to be occasional "letter got lost in the system" delays. Either HMRC's own systems have ridiculous delays between writing the letters and getting them printed and posted, or they're outsourcing some part of the process to an ultra-cheap "we'll get around to it when we've nothing else to do" supplier...

However, the purpose of this thread is to provide practical help with CGT issues, and providing the link was the only such help I could think of!

And while I don't mind the occasional digression into related issues such as the deficiencies of HMRC that you've described and I've added a bit about, I suspect a lot of people would feel they have something to say about them, to the point that they could easily swamp the practical-help aspect of the board... So if people want to discuss such issues, could I suggest setting up a separate thread for them, please?

And if anyone does set up such a thread, please do post a link to it here so that people know about it. That includes me, by the way - I'll almost certainly read such a thread and possibly occasionally contribute to it, it's just that I don't want such discussion to make me miss something on this board. Nor do I want the possibility that it will drive away posters who are willing to provide practical help about CGT, but only have very limited time available to do so.

Gengulphus

[investoree] 11/6/2016 11:10

Gengulphus - Thanks very much for the link I am protesting that as a matter of principle if it is my legal obligation to provide the CGT information to HMRC then they should provide me with the correct form to complete (especially when the SA108 form has been requested on at least 15 different occasions). Over the years I have had numerous dealings with local HMRC tax offices which have now all closed for unusual and sometimes complex inquiries which with the exception of one Buy-to-let inquiry didn't necessitate the intervention of an accountant.

It used to be comparatively simple to visit the local tax office for information, missing documentation and to hand in our tax forms rather than risk having them go astray in the post (as much of our mail has done over the years). On several occasions they arranged appointments with specialist tax officers at the tax office when our inquiries could not be answered by their staff or by using one of their telephones which unlike our calls were normally answered very promptly.

Now any inquiries are solely confined to either trying to make telephone contact or written correspondence with HMRC which normally takes them several months to write back, or they don't answer the phone for extended periods. Sometimes having answered the phone they can't provide the information requested because one of one of their systems has fallen over, or they are unable to transfer you to the correct department to answer the query. Most recently when a timed appointment for the specialist HMRC tax officer to telephone me back was made for 3.30pm the pleasant lady who phoned me back telephoned at 9am instead of keeping the afternoon appointment. She claimed that they didn't provide time slots to phone back - if the left hand doesn't know what the right hand is doing how on earth are they going to be able to pursue the large corporations who pay little or no corporation tax as they engage in making artificially high inter company loans transferred through various tax havens.

HMRC need to dramatically simplify the current unwieldy tax system, perhaps by starting all over again and rewriting it from scratch rather than trying to adapt an antiquated and archaic system which simply makes matters more complex with every change!

[pedr01] 03/6/2016 22:11

Welcome back David ... Have a good rest ad a speedy recovery ... All the best ...

[gengulphus] 03/6/2016 18:08

... and every year I also request that they send me the correct additional CGT summary form (SA108) to complete and every year they fail.

Is there some problem about downloading the form from their website and printing a copy yourself? Or do you just need to know where it is? If the latter, any of the last four years' SA108 forms can be downloaded from .

Gengulphus

[investoree] 03/6/2016 15:41

M_K_Hubbert - Thanks unfortunately following numerous changes of brokers since 1987 because of various take-overs etc there is no standard format from which to be able to input the relevant data. Also many companies have had several name changes, recapitalizations, share splits, scrip dividends etc so I have to use data from my contract notes along with info supplied in the various RNS's etc detailing the changes so it isn't possible to use HMRC's on-line service - also with some shares there have been multiple purchases over the years which I think exceed the total number of trades allowable. For many years I have used the same paper format to provide a breakdown of all the data entered on their SA 100 form and every year I also request that they send me the correct additional CGT summary form (SA108) to complete and every year they fail. This year they sent me another form to complete to which none of the sections related to me so I simply wrote the CGT info in the additional information details at the end of the SA form which will hopefully satisfy them. I have spent hour on the telephone trying to get through and written many letters requesting answers to queries and an E-mail contact address but they refuse to provide one. For many years I had my tax inspectors direct line number and E-mail address and it was simple to resolve any queries expediently and cost effectively. Most recently when I did manage to get through on the telephone their computers were down and there was no-one with the necessary knowledge to provide an answer a ring back was arranged and eventually the person I spoke to informed me that the section I needed had just been updated that day. HMRC staff are as helpful as they can be but the system is antiquated and archaic.

PS welcome back David and best wishes for a full and speedy recovery.

[sleveen] 03/6/2016 15:02

Best wishes david77.

I've also used your CGT calculator for several years with no comeback from HMRC.

[david77] 03/6/2016 14:43

Thanks for your good wishes - I am still in the land of the living and back home.

[optomistic] 14/5/2016 09:30

David77. Best wishes for a speedy recovery from your op.

[rangers99] 13/5/2016 20:45

Have a good recovery david.

[m_k_hubbert] 13/5/2016 19:05

Investoree, I understand that tasks like filing HMRC returns can become more time consuming with age but I've actually found that, as far as the shares-related sections are concerned it's a lot quicker and easier than when I filed these supplements via paper returns decades back. The trick is to keep records current unless your broker has good output tools in which case it can be done relatively simply at end of tax year.

With my broker (HL) the downloaded data (in CSV format) requires little manipulation for input into the online tax calculators apart from the 'dealing expenses' and 'tax' (transfer stampt on buys) not being broken out to which end I've written Excel formulae to generate these missing fields. For dividends available downloads from the HL income account include all transactions including cash withdrawals and transfers and there's no apparent way of using a filter to only capture dividend payments. I use the 'sort' function in Excel to sort the rows via transaction type and can then select blocks of adjacent rows for unwanted transactions, delete same then re-sort remaining rows (which are now solely dividend payments) into ascending date order. Process to extract dividend info for a tax year thus takes just a couple of minutes or so.

If you don't have Excel above should work in Open Office - I'm in the process of adapting my system to work with Open Office instead of Excel as PC and laptop are running Linux which won't support MS Office. My computer knowledge is mainly for systems and applications were not my strong point; even so I can make it work and if you care to PM me I might well be able to assist.

[david77] 13/5/2016 19:00

Thanks for your good wishes. The stonebanks calculator has been around for some time now (10 years or more) and HMRC have always accepted my returns.

[m_k_hubbert] 13/5/2016 18:12

David77, I have copied the calculation page and it loads fine; am using Firefox but copy (source) process is similar to what you describe for Opera. I take it the other pages should also be copied to one's PC, for example the converter to the CGTCalculator format.

Incidentally since my earlier post HMRC appear to have accepted both our tax returns without queries (one used Stonebanks and the other CGTCalculator for supporting calculations) - I've even received a modest refund for tax overpayment.

Best wishes for your operation next week and subsequent recovery. Thanks again.

[pedr01] 13/5/2016 12:29

Brilliant.

Thanks David.

[david77] 13/5/2016 09:55

I use the Opera browser and if you load the program then view -> Developer tools -> source then select all, and copy and paste to Wordpad and save on your machine as taxcalc.htm

That should save as a web page.