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Tax on shares

Tax on shares

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Dear all I have few question to ask regarding investing in company shares and how taxation works.

1. For solo purpose, if you borrow to invest (gearing) in major company shares (apple, facebook, netflix etc etc) that are listed in NYSE, NASDAQ and LSE,  can you offset re-payment of gearing (capital or interest or both) against profit made in investment ? Investor is a individuall, not wealth management firm.   

2. which tax you are liable to - Dividend or CGT ? 

3. Can you offset losses you make from investments against present and future tax years ? How many years you can backdate your losses ?

4. If you sell shares and you made profit but funds remains in broker account (eToro and H&L) and you reinvest this funds without making withdrawal from broker platform account? Do you have to declare this profits or losses while funds still remains in broker platform account ?

 

Thank you in advance. 

Replies (19)

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By HeavyMetalMike
13th Jan 2021 20:21

Bless. There’s a chap on here who knows how best to answer this sort of query. I’ll let him reply. He’s called Mr89 or something

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By Tax Dragon
13th Jan 2021 20:30

1. Capital only. On sale of the shares (not against dividends).

2. Both. Dividend tax on dividends, CGT on capital gains.

3. Same and future. CGT only. Backdate (3) in year of death only.

4. Yes.

Although danger of death from abuse of these answers is low, they may cause financial damage if not installed properly.

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Replying to Tax Dragon:
Psycho
By Wilson Philips
13th Jan 2021 20:55

I think I understand what you’re getting at re 1 but I don’t think your answer is strictly accurate.

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Replying to Tax Dragon:
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By Paul Crowley
13th Jan 2021 21:04

1 might mislead OP and his clients, without detailed explanation

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Replying to Tax Dragon:
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By Tax Dragon
13th Jan 2021 21:50

Ignore 1. (No detailed explanation intended.)

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By Paul Crowley
13th Jan 2021 21:02

Member since 2014
Claims to have clients

Sympathy for clients

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Replying to Paul Crowley:
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By Tax Dragon
13th Jan 2021 21:51

But says not an accountant.

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Replying to Tax Dragon:
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By massky
13th Jan 2021 22:27

Tax Dragon wrote:

But says not an accountant.

Hi Tax Dragon,

Thanks for your help which I truly appreciate it.
I am not accountant nor tax professional but I work in finance and just seeking help with this as it seems no one can give definitive answer. Everyone is says different opinions so i am bit confused about it. All I want is an answer what is eligible and what not with regards given gearing and investment scenario. I believe is open information that is not to be hidden so again I am just seeking help.

Thanks

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Replying to Tax Dragon:
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By Paul Crowley
13th Jan 2021 22:49

' Replying to Ian McTernan CTA:
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By massky
23rd Jan 2015 04:18
No i am not an accountant, but it seems sometimes they get it wrong as well. It's just simple question, can you get tax relief on motoring expenses & allowances when balancing the books ? '

Agreed, accountants are useless

Qualifications are not worth spending the time and money on. Interwebnet has all the answers a person needs.

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By Truthsayer
13th Jan 2021 22:13

Hire an accountant, or you are likely to have a disaster.

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Replying to Truthsayer:
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By massky
13th Jan 2021 22:58

Truthsayer wrote:

Hire an accountant, or you are likely to have a disaster.

No offence but I asked two accountant's and I've received two different opinions. It's not massive investment, it's bellow £12,300 for CGT and £2k for dividend. Needed for future tax years thought. The main think was can gearing be offset against CGT ?

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Replying to massky:
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By Youareatit
13th Jan 2021 23:34

massky wrote:

Truthsayer wrote:

Hire an accountant, or you are likely to have a disaster.

No offence but I asked two accountant's and I've received two different opinions. It's not massive investment, it's bellow £12,300 for CGT and £2k for dividend. Needed for future tax years thought. The main think was can gearing be offset against CGT ?

So, how can you trust a word accountants on here say?

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Replying to massky:
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By Paul Crowley
14th Jan 2021 00:38

What were those opinions?

Was the question just about gearing?

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By Tax Dragon
13th Jan 2021 23:47

Buy something for 1000, sell it for 1200, that's a gain of 200. No offsets for gearing.

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By DKB-Sheffield
13th Jan 2021 23:54

Makksy

This forum is primarily for accountants to discuss situations they are faced with - BEFORE (and this is the most important point) taking that information, reviewing/ researching further, and then applying it to the particular scenario they are facing.

It IS NOT a forum designed to provide free, specific, tailored, expert advice to consumers. I feel you may have misunderstood the purpose of AW.

As you state, you work in finance so, you must understand that every taxpayer has different circumstances. Therefore, you should also realise that, without a full understanding of your own circumstances, objectives and intentions, the "collective we" are unlikely to provide a full and comprehensive answer to your questions.

I seriously recommend you approach an accountant who will review your situation and advise accordingly. Whilst I appreciate you have "asked" two accountants and received two different answers, it may be that the questions posed were interpreted differently. I also wonder whether this was fully engaged advice or whether, like here, you sent speculative emails, expecting free advice.

Finally, please be aware, most accountants on this forum will move heaven and earth to give justifiable responses to questions and to help in any way they can. However, you are unlikely to receive a favourable response if you criticise the profession, or make comments downcrying other accountants for taking differing viewpoints. Afterall, you have provided a relatively poorly worded question!

Note for future... don't criticise accountants on AccountingWeb. For some unfathomable reasin this forum us full of 'em!!!

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Replying to DKB-Sheffield:
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By Tax Dragon
14th Jan 2021 06:42

Well said, but on your last point, a large percentage of the people that post in here are not accountants, tax advisors, tax lawyers, etc. Nor, dare I say, do a fair few of them appear to have any interest in accountancy.

Now of course most such persons, like young massky here, only ever ask and never answer. They're here only to take and never to give. (Except they don't see it as taking - not having read any of the blurb about what the forum is for and how it, haha, works, they think it is a free advice service. I swear they think that there's a panel of experts who sit down together, consider their question and give free, personal advice. If something is offered free, acceptance of the offer is not 'taking'.)

Where was I? Oh yes... what that means (thankfully) is that most respondents, like you say, are professionals of some kind. Even me.

The bit I don't get is, once the non-professional OPs learn how the forum actually operates - anyone can ask anything, anyone can answer - why do they not get your (indisputable, obvious) point that (since it's not a panel of experts, and only a panel of experts, answering) any response is only ever an opinion, a pointer to some legislation, maybe a bit of guidance or moral support (aka a vote)? They've no idea who's giving said response; they've no idea whether it's... in many cases, whether it's even relevant, let alone "right". Has the respondent even understood the question?

Case in point - I'm not sure for example, whether Paul and I have read the question(s) here the same way. I think I have answered the question(s) that I think the OP asked. And done so correctly. But I'm* not going to go to court to defend my answers if they're wrong, or if they cause the OP or anyone else financial loss. (See the "beware, hot contents" disclaimer in my first reply.)

*Nor for that matter is Sift/Aweb. Disclaimers all over the site. (Not that OPs read disclaimers.)

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By Tax Dragon
14th Jan 2021 06:32

Massky, I would hope that many of your clients have accountants. They should rely on their accountants, and not on you, for tax advice. Indeed, you should not give tax advice.

If you're asking for yourself, maybe you could do with engaging an accountant yourself.

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Replying to Tax Dragon:
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By bernard michael
14th Jan 2021 09:10

Tax Dragon wrote:

Massky, I would hope that many of your clients have accountants. They should rely on their accountants, and not on you, for tax advice. Indeed, you should not give tax advice.

If you're asking for yourself, maybe you could do with engaging an accountant yourself.

I wonder if he's actually MDTP trying to expand his knowledge while his "office" is shut during lockdown

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