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Where Taxpayers and Advisers Meet

CGT on shares sold and bought back on same day

eggsnbacon
Posts:14
Joined:Sat Apr 02, 2016 6:27 pm
CGT on shares sold and bought back on same day

Postby eggsnbacon » Thu Jun 20, 2024 11:10 pm

I would be very grateful if someone could tell me how CGT is calculated in the following scenario.
I invest £20,000 in shares of company ABC. 6 months later I sell those shares for £40,000, and buy them back on the same day (or within 30 days) for £35,000. Is CGT payable on the profit of £20,000 (£40,000 - £20,000), or on £5,000 (£40,000 - £35,000).
Thanks very much.

bd6759
Posts:4323
Joined:Sat Feb 01, 2014 3:26 pm

Re: CGT on shares sold and bought back on same day

Postby bd6759 » Fri Jun 21, 2024 10:25 am

www.cgtcalculator.com


The answer is £5000.

The base cost of your pool after these transactions remains at £20,000.

AGoodman
Posts:1793
Joined:Fri May 16, 2014 3:47 pm

Re: CGT on shares sold and bought back on same day

Postby AGoodman » Mon Jun 24, 2024 10:49 am

Caveat: If either transaction was with a connected party or at an undervalue, it would be deemed to have taken place at market value.

This means that if the value of the shares did not actually change by £5k between the sale and then purchase shortly thereafter, you may not have made a gain.

eggsnbacon
Posts:14
Joined:Sat Apr 02, 2016 6:27 pm

Re: CGT on shares sold and bought back on same day

Postby eggsnbacon » Thu Jun 27, 2024 4:10 pm

Thanks very much.


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