Selling my shares for cash in the UK.?

Question

I plan to sell some shares online through Equiniti a reputable firm,

the total should be in excess of £15,000.00.

What i'd like to know is do i have to pay tax on this amount.

I heard that you have to pay tax on profit above £8,500.00 but what constitutes profit.

Does this mean the £6,500.00, the difference between the two figures

or is it some other method that is used to work out the profit.

Please dont answer with opinions or guesswork as i need a definitive

answer to this particular question.

Answer 1

You have to pay tax on the profit although the first £9600 of the gain is tax free (this is you annual CGT allowance and it increases each year). So for example if you bought the shares for £10,000 and now are selling for £15,000 then the capital gains is £5000. However, as this is within the £9600 allowance (assuming you have not made any other capital gains in the period April 6th 2008 to April 5th 2009) then there would be no tax to pay. Any gains over and above £9600 is taxed at a flat rate of 18%.

Disclaimer:

The answers above are for guidance only and should not be acted upon without you receiving independent financial advice relevant to your circumstances.  To find and IFA please call 0800 085 3250 or go to http://www.unbiased.co.uk.

Answer 2

You have to pay capital gains tax on gains over a certain amount per annum (£8,500 sounds close to this amount although I am not an expert)

It used to be indexed, but I think it is not indexed now although there is some relief for investments held prior to the change (in other words you used to be able to reduce the profit for gains which were realised in excess of inflation, however due to low inflation this has been removed)

Capital gains tax is taxed on the difference between the amount realised and the amount spent buying the asset.  If the purchase and sale is done within a tax year, it is straight forward.  If the purchase was made a long time ago, then there is some relief for inflation. (however this has been removed for future capital gains)

I believe the tax rate is lower now for capital gains tax, compensating for the loss of indexation relief to some extent.

It is difficult to answer your question definitively as you have not said when you bought the shares, what you paid for them, or whether they were held in a tax free wrapper like an ISA, PEP or SIPP.

Profit for tax purposes, is defined by the inland revenue rules.  I suggest you look at their website for a definitive answer.  Some tax calculation routine software can be bought, but it needs updating every year and is hardly worth it if this is your only potential capital gains.

Answer 3

1. profit=inkum - outgo...how much yu get wen yu sell minus how much yu paed for it.

2. If yu paed a kommisshun tu bi it, thats part av yer kost.

3. If yu got dividends, yu reported em on inkum tax that yeer.

but if get dividend in same yeer as sell, gotta report that as separat thang.

Answer 4

The CGT allowance is £9600. If the shares cost you more than £5400 there is no taxable gain and you don't have to report it to HMRC.

(Assuming you have made no other taxable gains in the year)