Tax on shares?
14 November 2006, 02:50 PM
#1
Tax on shares?
Hi
A real basic question that I need answering -thanks
I am thinking of online share dealing.
Can someone let me know if
1. I have to pay tax on the profit of shares I own and if so will I
2. therefore will need to fill in a tax return or
3. is tax taken off when you sell through your online broker (e.g Barclays)
I cant seem to find a simple idot proof answer to this
Thanks
Steve
A real basic question that I need answering -thanks
I am thinking of online share dealing.
Can someone let me know if
1. I have to pay tax on the profit of shares I own and if so will I
2. therefore will need to fill in a tax return or
3. is tax taken off when you sell through your online broker (e.g Barclays)
I cant seem to find a simple idot proof answer to this
Thanks
Steve
14 November 2006, 03:14 PM
#2
Scooby Regular
Join Date: Nov 2000
Location: 32 cylinders and many cats
Posts: 18,658
Likes: 0
Received 1 Like
on
1 Post
My understanding as a non-financial professional is:
You pay stamp duty when you buy them.
You pay income tax on the dividend income at your marginal rate. I think some of the dividend might be taxed before you see it, but I'm not sure.
The (hopeful) growth in the share value is a capital gain. You can use up your annual capital gains tax allowance and repurchase the shares after a month. Bedding and spousing can be used, bed and breakfasting is no longer possible because of the one month period. If you hold the share over a long period you may be able to get taper relief at the time you sell them and not be charged the full whack of CGT you'd otherwise expect.
It is your responsibility to tell HMRC about any gains you make.
If you haven't used up ISA allowances for yourself and spouse it would most likely make more sense to do that first since you are shelted from stamp duty, tax on dividends and capital gains, and you don't need to complete a tax return.
You pay stamp duty when you buy them.
You pay income tax on the dividend income at your marginal rate. I think some of the dividend might be taxed before you see it, but I'm not sure.
The (hopeful) growth in the share value is a capital gain. You can use up your annual capital gains tax allowance and repurchase the shares after a month. Bedding and spousing can be used, bed and breakfasting is no longer possible because of the one month period. If you hold the share over a long period you may be able to get taper relief at the time you sell them and not be charged the full whack of CGT you'd otherwise expect.
It is your responsibility to tell HMRC about any gains you make.
If you haven't used up ISA allowances for yourself and spouse it would most likely make more sense to do that first since you are shelted from stamp duty, tax on dividends and capital gains, and you don't need to complete a tax return.
14 November 2006, 03:19 PM
#3
Scooby Regular
Join Date: Aug 2003
Location: Epsom
Posts: 5,832
Likes: 0
Received 0 Likes
on
0 Posts
you pay capital gains tax - current exemption is about 8.5K then the rest is taxable income added to your salary then tax is paid at the applicable rate that you pay
14 November 2006, 05:32 PM
#5
Scooby Regular
Join Date: Feb 2002
Location: nix fur bremser...
Posts: 1,757
Likes: 0
Received 0 Likes
on
0 Posts
Originally Posted by john banks
My understanding as a non-financial professional is:
You pay stamp duty when you buy them.
You pay income tax on the dividend income at your marginal rate. I think some of the dividend might be taxed before you see it, but I'm not sure.
The (hopeful) growth in the share value is a capital gain. You can use up your annual capital gains tax allowance and repurchase the shares after a month. Bedding and spousing can be used, bed and breakfasting is no longer possible because of the one month period. If you hold the share over a long period you may be able to get taper relief at the time you sell them and not be charged the full whack of CGT you'd otherwise expect.
It is your responsibility to tell HMRC about any gains you make.
If you haven't used up ISA allowances for yourself and spouse it would most likely make more sense to do that first since you are shelted from stamp duty, tax on dividends and capital gains, and you don't need to complete a tax return.
You pay stamp duty when you buy them.
You pay income tax on the dividend income at your marginal rate. I think some of the dividend might be taxed before you see it, but I'm not sure.
The (hopeful) growth in the share value is a capital gain. You can use up your annual capital gains tax allowance and repurchase the shares after a month. Bedding and spousing can be used, bed and breakfasting is no longer possible because of the one month period. If you hold the share over a long period you may be able to get taper relief at the time you sell them and not be charged the full whack of CGT you'd otherwise expect.
It is your responsibility to tell HMRC about any gains you make.
If you haven't used up ISA allowances for yourself and spouse it would most likely make more sense to do that first since you are shelted from stamp duty, tax on dividends and capital gains, and you don't need to complete a tax return.
Cheers
Kav
Thread
Thread Starter
Forum
Replies
Last Post