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FAQ - Investment Answers - Hi, I will use an example to explai...
Question
Hi, I will use an example to explain what I mean. I have 100,000 shares (at a cost of £10,000) that I sell and make a profit of £10,000 (worth £20,000 in total when I sell). And for which I have then used up my annual CGT allowance of say, £10,000. I invest that £20,000 in a house and that's that. Money gone. I also have *100,000 shares (of a different sort) at a cost of £10,000 which are currently in profit by £5,000 (£15,000 total value). Supposing I wish to then buy into a third different share. If I cash in a portion of my *remaining shares (of £15,000) to the value of £10,000 (the original value paid) is this classed as money that is invested my me initially (exempt from CGT) or is it classed as a gain on top that is then taxable as CGT? Effectively are gains over CGT from the subsequent sale of shares classed as gain first, capital invested second of the other way round? Many thanks, S. Wright Halifax. - Posted by Non-ISA Shares and Capital Gains
Answer
ANSWER 23rd January 2010
Hi
Seems you are making this more complicated than it is. I am not sure what you mean by 'capital invested'. All gains in any one tax year are taxable to CGT (less your annual allowance). If you have already used your allowance then any subsequent disposals that produce a profit will be taxed. If you sell one share of your other holding (at a profit of 50%) that profit is taxable at 18% CGT.
Basically you add up all your gains and losses on disposals in the tax year deduct your allowance and the rest is taxable.
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Readers Comments
fr
Add A CommentJanuary 26, 2010, 8:21 pm
if you sell the first shares at £10k profit at the end of march 2010, and the second set of shares at £5k profit at the 10th of april (either side of the tax year), then you use the 2009/10 tax year allowance of £10100 and the 2010/11 tax year allowance, and therefore have no CGT to pay.
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