Morning All,
Just after some advice.
Do i have to report capital gains when i sell shares for under £1-£10.
Also would i have report it if i didnt withdraw the money from my standard freetrade account and reinvested it?
Apologies for the amateur questions (Newbie here).
Thank you.
Value of share or value of total sale are somewhat irrelevant
You are simply liable for any gains over and above you annual CGT limit.
So if you’re within that limit (currently about £12k per year) you do not report if you’re PAYE. If youre self assessment you tend to report all.
If you’re over that limit you’re liable.
When you enter your total annual sales into your tax return your liability will be worked out for you.
Yes, you’re liable even if you don’t withdraw. Your liability is generated by the transaction itself not what you did with the proceeds afterwards
Some useful info here: The totally NOT complicated investment tax post
Brilliant, so much easier to understand that, thank you.
Hate trawling through the HMRC website it’s like a minefield of links etc.
Alternatively use an ISA.
Agreed absolute nightmare especially for a non-UK resident. Do you want the stamp duty or not? 
They make it so difficult
Capital gain tax is really simple in the UK though, even for non-UK residents. At least compared to the US…
Stamp duty is a nightmare though. Wouldn’t know on CGT never paid any in the UK
It is to understand the basics but they don’t explain it well when it comes to high earners and other outside sources.
Exactly, you never paid CGT because it is straightforward. You only have to report it if you go over the allowance, and if/when you do all you have to do is take the total amount from your statements a put it in a box or form and it calculates for you, 10% or 20% flat rate depending on your income.
However, that is assuming you don’t have an ISA which you should by the time you are earning over £12k a year.
Stamp duty is paid when you buy a stock and the broker shows you what you are paying when you place your order. FT shows it in the confirmation window.
Govt have announced a review of CGT. With such large sums to recoup from the pandemic something has to give and this may be one area where they decide to do so. Is it likely they will try to scrap the allowance all together? I imagine big changes would affect quite a few people on the platform, and also would probably make larger investment in stocks less attractive in terms of tax efficiency, and reduced potential gains.
I believe your theory is a likely outcome. The barrier to entry for dividend & stock investments is now so low that there will be a shake up to make it less profitable in the future. I think millennials should be as creative as possible when thinking about their retirement holdings, to offset any major changes to how they collect their future isa investments etc…
This review is a regular occurrence so no need to read too much into it.
My thoughts exactly. Any suggestions for the best ways possible to do so? It’s tough to nail it when the goalposts could move at any time regarding ISAs, dividend allowances, etc… of course these things could always change, but it does feel like it will get more tricky for millennials to build wealth for the future, a bit like getting on the properly ladder has become a lot more difficult over the past 20 years.
You are right that there is no need to worry about it yet - as nothing has been decided. I do however think that just because reviews are cyclical is not in itself a reason to be serene about this one.
Previous reviews have not taken place in a world where the government has spent unheralded sums of money and accumulated unprecedented levels of debt as is now the case. There will have to be some areas where the coffers are topped up and I can see this being one of those where something may well give. And away from having my hat on as a young renter trying to start investing for the future (35 isn’t really young I know) I can understand why changes here would be popular to many who don’t have the luxury of being able to invest (it should far more common place and not a luxury But that’s not important here). It does feel though that those who would actually be most impacted by changes would be likely to be those who are in the middle - with enough money to be starting to invest, but little enough money, that changes would most likely impact their ability to justify paying the extra taxes associated. Namely the big slice of the main market that Freetrade and other investing fintechs are rightly basing their growth on.
But yeah, we won’t know if it’s nothing, or something, for at least a few months. Would be interesting to know if the industry and complanies like Freetrade lobby the govt on things like this though, to help maintain the current rules, etc… or whether it would make no difference whatsoever. I guess most of that would come later after any recommendations and prior to a vote to legislate on them.
Millennials would not really know the true outcome until they start to retire. That’s why being creative now and starting hedges sooner rather than later could help offset any nasty changes or capital gains.
CGT to be reviewed imminently.
This article seems to suggest that it could be slashed down to only £1k or match the £2k currently allowed for dividends.
The £1k limit came out of a Labour proposal and, seeing as how they didn’t win, seems unlikely to come to fruition.
Things have changed quite a bit since the election. There’s a lot of chat now about the Conservatives taking up that policy in the current economic circumstances - even if it was something the Tories would never have contemplated previously.
I do not understand the reasoning. It is not as if taxes are required to pay for spending so it just seems counter productive to remove money from the economy at this time.