I mean, they are asking a conservative lobbying group what they think of increased taxes for the people they represent. Itās like reporting that water is wet 
Question on capital gains tax allowance of 12 000:
Does anyone know if you need to sell and re-buy the stocks to register capital gains yearly?
I.e. say you are holding 100k worth of stocks that will be worth 200k in 10 years. Do you need to sell and re-buy it every year and register the gains or can you simply sell in 10 years and not pay tax anyway because it accumulated over 10 years? Can you register a gain if you donāt actually sell?
Probably a stupid question but I felt like asking 
The gain is just when you sell, you donāt pay any taxes on it until then.
Inn your example you would pay tax on the full gain (above the allowance) in the 10th year when you sold
If you mean can you sell and buy each year to use the allowance each year?
In this case you would just be better having an ISA. If you have any US stocks, the double exchange of selling and re-buying is likely to be greater than the Ā£36 yearly charge for the ISA.
I do have ISA but I hold quite a lot of stocks that are not eligible (like NIO, Tencent etc) and while I do intend to hold on most of it long term it seems like I would have to sell and re-buy early to avoid paying a massive tax in 5-10 years.
This is correct yes. The CGT Allowance is a āuse it or lose itā tax break.
You need to wait over 30 days or it wonāt count.
I think you can sell and immediately buy a highly correlated security though if there is one available.
Are you sure? I always thought that was just for loss-purposes.
Not sure, itās not currently relevant to me so not something Iāve looked at in detail but that was my understanding.
This seems to suggest itās right, but I could be missing something.
Another approach is selling in tranches so that you donāt hit the tax threshold, but this could take some time for large amounts.
Thatās what I was asking about ā essentially you have to sell and re-buy to make as close to 12k in profits each year. Makes sense.
Itās the rebuying part that I think others are trying to explain isnāt quite so simple. If you just sold a tranche and then pocketed the mkney, then thatās clear in working out cgt. If you rebought though, I understood that there are limitations on how quickly you could rebuy.
For instance, the taxman isnāt likely to allow you to buy and sell on the same day as your actively trying to avoid tax. There is a fine line over avoidance and evasion though and I donāt think here is the right place to get specific advice for your situation. You might be better off taking professional advice if youāre considering a very large cgt liability that you need efficient tax planning for over the long term.
Of course too, cgt rates and allowances are likely to change.
āAnother thing to think about is the possibility that you may build up a large capital gain in excess of the annual CGT exemption over time. To reduce this risk you can use your annual allowance to sell at least part of the holding at the end of each tax year and then buy it back. By doing this, you reset the cost of your holding at a higher level and so reduce the potential profit against which your future CGT liabilities will be calculated.
Tax rules mean that you have to wait 30 days before you can buy the same holding backā
So basically try to work out if the risk of being out of market for 30 days is lower than the tax bill.
I see. I am totally being stupid here. I didnāt mean to avoid tax.
In fact I thought that maybe they will allow you to declare profits even without selling. It is a capital gain even if you decide to continue investing in the market in a way.
I guess I can sell one stock and buy another one.
Itās more that you need to be very careful with tax. Iām sure I read somewhere that the ukās tax code system, which I assume to also mean things like cgt, is one of the most complicated in the world.
The 30 day example is a tricky one. Itās a long time to be out of a share that youāre following for the long term. Might pay off. Might not 
Avoiding tax is perfectly fine, even sensible, itās evading tax thatās frowned upon. What you could potentially do is sell the stocks and use another instrument to keep exposure to them for 30 or so days before you can rebuy, like a spread bet or CFD.
They wouldnāt be subject to CGT but it would be slightly messy, youād probably need free cash to do it and those instruments should only be used by people who understand them.
CFDs are taxable.
Spread bets are tax free.
I know some people who use dividends to offset capital gains if they still have allowance left.
As an example you buy a company for 100p which is going to issue a 20p special dividend.
After the dividend is paid the share price drops to 80p so you have a capital loss of 20p.
This was more useful when dividend allowance was Ā£5k and now it is only Ā£2k so extra effort for little reward.
3 posts were merged into an existing topic: Understanding ISAās
Ah, of course. Good spot on the CFDs, thanks.