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ChatterBank0 min ago
Effect of buying and selling shares within 30 days
5 Answers
I'd appreciate a simple explanation please.
Buy shares 1 June and make a profit of �200 by selling 6 August.
But what is the arithmetic if share sold at a profit of �200 a fews days after buying?
Buy shares 1 June and make a profit of �200 by selling 6 August.
But what is the arithmetic if share sold at a profit of �200 a fews days after buying?
Answers
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I'm so sorry for carelessly not stating the *purpose* of my question.
It's to do with CGT and the rules surrounding how to calculate it.
I'd prefer not to make gains over the annual �8500 limit, so to obey the rules, I need to know the effect of selling a share within a month at a profit - as opposed to selling more than a month later where the position is clear.
It's to do with CGT and the rules surrounding how to calculate it.
I'd prefer not to make gains over the annual �8500 limit, so to obey the rules, I need to know the effect of selling a share within a month at a profit - as opposed to selling more than a month later where the position is clear.
OK, I'll preface this by stating that I am NOT a qualified tax accountant nor am I qualified to offer investment advice.
At its simplest, the annual CGT limit applies to a financial year, currently 6 April 2006 - 5 April 2007. In the example you offer, both the purchase and sale fall within the same financial year - whether the sale is within one month of a June purchase or in August. Therefore, the only effect on CGT is whether this takes you over the limit or not.
[Of course, if you have losses carried over from a previous tax year it is possible to make a larger capital gain and still have no tax liability.]
Maybe someone else on AB with more detailed knowledge can advise further? If not, I'd suggest spending some of your capital gains on an accountant.
At its simplest, the annual CGT limit applies to a financial year, currently 6 April 2006 - 5 April 2007. In the example you offer, both the purchase and sale fall within the same financial year - whether the sale is within one month of a June purchase or in August. Therefore, the only effect on CGT is whether this takes you over the limit or not.
[Of course, if you have losses carried over from a previous tax year it is possible to make a larger capital gain and still have no tax liability.]
Maybe someone else on AB with more detailed knowledge can advise further? If not, I'd suggest spending some of your capital gains on an accountant.
I think the 'bed and breakfast' rules referred to the selling of shares immediately before the end of the financial year and then buying them back at the start of the following financial year - I think to crystalise a loss and thus avoid CGT.
There were definitely changes to the rules on this - but as I said, you really should seek professional advice.
There were definitely changes to the rules on this - but as I said, you really should seek professional advice.
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