Capital Gains Tax

Kickstart · The Oracle Joined: 04 Feb 2002 Karma :

Hi

Anyone any good knowledge of capital gains tax?

Best I can find is that the limit is currently £8800. However not sure with a sharesave scheme what is covered by the £8800. Does that include the money you put in? Does it include the interest on the money you put in? If you exceed the limit do you get taxed on just the amount over the limit or on everything? At what level do you get taxed?

All the best

Keith
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finpos · World Chat Champion Joined: 13 Sep 2005 Karma :

It's all part of gordons plan to keep civil servants in a job by having very complex tax rules.

8800 is your allowance per tax year (i.e. you can earn that much before they bother you), and it's gains tax so includes only the money you actually made above that limit (not what you paid in). You'll pay tax at the same rate you normally pay (so 20% or 40% if you are a higher rate tax payer, or, indeed if this makes you one).

You will normally have to pay tax on any earned interest (again at your normal tax rate) unless it's in some scheme to protect it (e.g. an ISA)

If you fear you are in any danger of paying this, go see a tax accountant.

finpos.

Itchy · Super Spammer Joined: 07 Apr 2005 Karma :

give half to Charlotte = splitting the liability in two and wayy below the CGT limit
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Mrs Kickstart · Brolly Dolly Joined: 06 Apr 2004 Karma :

Hi,

innominate · Brolly Dolly Joined: 18 Nov 2004 Karma :

Hi,

I was wondering this myself.
I had a look around and this thread gave me the best explanation. (As a lamen in the areas of Tax myself.

Essentially you have a CGT allowance of £8800 a year.
The Capital Gains would be the amount of GAIN you made on each share.

E.G.
So if your sharesave gives you an option to buy shares @ £1 (Market value now £2.50) you would take the difference between the two and divide £8800 by that.

So you could sell 5866 shares before the shares themselves took you into the CGT bracket.

Just keep any other shares to the next year.
Or gift them to a partner so they can sell against their CGT allowance.

So assuming you both have full CGT allowance for the year, you could make £19600 more than you put into your sharesave scheme before being taxed by CGT.

My sharesave scheme matures in two years.
If the company keeps going the way it is atm then I could possibly use up all that allowance and more.

so would just keep the shares to the next year , sell then.
Or stick the shares in a MAXI ISA.
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