ah I see, interesting, my accountant did this for me and I just gave them my spreadsheet. You can’t fill in that form for every sale though can you? I think somehow can attach a spreadsheet.
Yes. I just attach a printout of my spreadsheet. Each line contains all the same information that appears in the HMRC working sheet. The instructions say that you can attach your own workings and that you do not need to use their working sheet.
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Have Q’s:
Case 1: CGT allowence is about 4k remaining from the 12.5k.
Bought shares and let’s say profit of 24k from Invest and CFD.
When the shares are sold would am I eligible for tax straight away since am over the CGT allowence, even if I don’t withdraw the funds.
Case 2: Can I transfer/move the sold profit of 20k from CFD/Invest to the ISA, would that cancel out the remaining CGT limit from Case 1 or still eligible for CGT?
Or is it only when money is deposited directly into the ISA that it counts.
The capital gains is realised and becomes taxable at the moments the Invest or CFD investments are sold. It makes no difference what you do with the money subsequently. You cannot avoid the tax by either leaving the money in your account or reinvesting in some other share or in an ISA. If you have 24k of gains you will need to complete a self assessment tax return and pay the tax.
@Richard.W Thank you very much for your prompt answer.
Things are much clearer now.
Will do the self assessment.
Very new here and Still learning, learnt loads from this post so thanks.
Have a few questions
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If you invest say £1,500 and you are lucky with great gains from our stocks and say make 5k but reinvest back into stocks would that effect CGT?
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On the 212 app where in history can you see how much profit you have made so you know when you have hit the threshold of paying CGT.
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Say you make 13k profit from your stocks how much tax would you pay in percent?
Thank you again for this post. I will lots more reading to do on this subject.
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In a taxable account you create liability for capital gains tax at the time investments are sold, irrespective of how the proceeds are subsequently reinvested.
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This is not shown in a reliable way in the app. You need to keep your own records. One reason is that the app does not calculate gains segregated to within 5 April - 6 April tax years. A second reason is that some people hold shares on more than one platform. When I sell 10 Apple I have to figure my gain by looking at average cost over all platforms on which I hold Apple shares.
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For a UK taxpayer there is a £12,300 allowance per tax year. Above that you pay 10% or 20% depending if you are basic or higher rate taxpayer on your other income.
The HMRC pages are easy to read. Just Google: HMRC Capital Gains tax.
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Thank you very much. I will carry on my learning today and make a spreadsheet to help keep track of my CGT.
Sorry if this has been asked before.
Do you still have to do a self assessment if you don’t make a gain over £12,300? Say you make a 9k gain?
Thank you
If your total gains are less than the tax-free allowance
You do not have to pay tax if your total taxable gains are under your Capital Gains Tax allowance.
You still need to report your gains in your tax return if both of the following apply:
- the total amount you sold the assets for was more than 4 times your allowance
- you’re registered for Self Assessment
There are different rules for reporting a loss.
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Another basic question, but do you still have to do a self assessment if all your gains are within a Stocks & Shares ISA?
Even if you made a 100 gazillion pounds - but only ever inside an ISA
Nope, all gains (dividend and capital) are tax-free in an ISA.
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I get that but do I still have to declare it?
Edit. Cheers @ryan9921 and god bless the ISA
saves my lazy ass from dealing with taxes
Hi, I’m looking for some advice regarding capital gains declaration in the UK? How easy or difficult is it to complete the assessment form to declare proceeds? Will the statement T212 provide suffice or is additional work involved. I’m almost reluctant to do anything now in case it takes me over the threshold of my allowance. Any help/insight will be very much appreciated. Thanks in advance.
@Richard.W Thank you for sharing your knowledge, also your patience in replying to all the queries, very much appreciated. Do you know any how this works stock splits, I mean buying before stock split and selling sometime after? Also with rights issue such as recently with IAG SA. Thanks in advance.
You are right to think that there is a calculation to do. The issue is the basis cost of a share or shareholding, which you will need to know when you someday come to compute capital gains when your shares are sold. Let’s do some examples from my own portfolio.
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My Apple shares had been purchased at an average cost of £41.54 a share. When Apple split 4:1 I was left with 4 times as many shares, so each has a new basis cost of 41.54/4 = £10.38 per share. (I know this sounds a ridiculously low cost for an APPL share. I have had them a long time.)
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On 21/11/19 Celgene was taken over by Bristol Myers Squibb. For each CELG share I received $50, one BMY share and one BMY contingent rights share. My basis cost for my 340 CELG shares was £6,086. On the day that I received my cash, BMY and contingent rights shares, their prices on the market were $50, $56.85 and $1.875 respectively, representing fractions 0.460, 0.523, 0.017 of the value of my new holdings. So I immediately had taxable capital gains of 50 x 340 x 0.7740 - 0.460 x 6086 = 10358 on the cash (0.7740 being the USD/GBP rate that day). My holding in BMY now has a basis of 0.523 x £6,086 and my holding in the contingent rights has basis of 0.017 x £6,086. You see the principle: The old basis is reallocated amongst new holdings in proportion to their values on the day of taking ownership of the new holdings.
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Pfizer has recently had a demerger into Viatris. Again, my basis in 1036 PFE shares was £28754. I received 128 VTRS shares. Their prices on the day, 19/11/20 were PFE = $36.19, VTRS = $18.15. From this I can work out that the basis on my VTRS shares should be a fraction 128 x 18.15/(128 x 18.15+1036 x 36.19) of 28754, ie £1471 and my new basis for the PFE shares is now £(28754-1471).
I hope these example help. If there is a rights issue into which you add fresh cash to obtain further shares then that cash injection would be added to your basis cost.
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Thank you very much for these examples,?they’re very helpful. I was looking at the examples on the HMRC website on how to work out basis cost. Do they expect you to do these calculations for all the shares you’ve sold on the self assessment form?
I am not a tax accountant, so only speaking from personal experience. What I do is to prepare an attachment to upload to the Capital Gains section of my Self Assessment return. This is a pdf which I have printed from a Google sheet where I have listed each sale in the tax year, one per line, showing:
- instrument name,
- date of purchase,
- date of sale,
- cost,
- proceeds,
- gain/loss.
I mimic the same information they ask for in the optional capital gains computation worksheets.
The “date of purchase” may be one day, but usual I write “Section 105” (which means purchases made over many days).
Suppose I have bought Apple shares on many occasions. My average price per share is £20, say, and I am now selling 150 shares. So I write £3000 for cost.
All the calculations are done by me and kept in a Google sheet, in case HMRC would ever wish to contact me and delve deeper. I would not include in my return the fine details of the calculations in the examples above. I also have saved, or know where I can find, all the paperwork that I would need to produce if I needed to prove that my average price is indeed £20 per share, including notes about the exchange rate at each of my purchases and sales.
So long as you know you are paying the right tax you cannot get in trouble simply for the way you report what you owe. Fines and prison are only for deliberate misreporting and underpaying. I was once given the good advice that tax forms are meant to be a simplifying way of talking to the tax man. Each section of the Self Assessment has an optional white box in which you can write notes if you think there is something else it would help them to know.
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Makes sense. Thanks @Richard.W. I’ll start working on my spreadsheet. Although I’m below my allowance threshold, I have made sales 4x the allowance so I think that where HMRC comes in. Thanks again.