This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Shares investments tax

tomki
Posts:39
Joined:Thu Aug 01, 2013 1:48 pm
Shares investments tax

Postby tomki » Wed Jan 13, 2021 4:12 pm

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


1. If you borrow loans/mortgages for solo purpose and you invest this money into company shares, can you offset re-payment (interest & capital) of borrowing debt against if you make any profit invested in shares ?

2. If you withdraw funds from your account in regularly bases, which tax you have to pay Dividend or CGT ? Or if you withdraw once a year which tax you have to pay Dividend or CGT ? Obviously which element of tax you have to pay ?

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 you don't withdraw it from broker platform to your account but you anticipated to re-invest again by buying new shares ? Do you have to declare this profits or losses while funds are in broker platform ?


Thank You !
Tom

iwmtaxadvisor
Posts:10
Joined:Wed Sep 09, 2020 5:12 pm

Re: Shares investments tax

Postby iwmtaxadvisor » Wed Jan 13, 2021 5:28 pm

It is possible that someone else can answer your question using the assumption that you are talking about non-quoted or private shares, which actually from a tax viewpoint is much more enticing.
Assuming you are talking about quoted shares and are UK resident:-

> I...can you offset re-payment (interest & capital) of borrowing debt against if you make any profit invested in shares ?
No. Having said that, if you invest through a family investment company, and the company borrows, yes, with conditions.

> 2. If you withdraw ... which tax you have to pay Dividend or CGT ?
Irrelevant. You'll pay income tax on interest and dividends and accrued interest whether or not you withdraw it, and same for gains tax. Unless you invest through a tax favoured account.

> 3. Can you offset losses you make from investments against present and future tax years ?
Yes, gains only. You can bring forward unused losses indefinitely.

> 4. If you sell shares and you made profit but you don't withdraw it from broker platform to your account.... do you have to declare this profits or losses while funds are in broker platform ?
Declare, yes.
Most brokers and private banks in the UK will deliver an annual UK tax certificate containing these figures. I am not sure about 'platforms'. By implication HMRC will get these figures declared to them at some point.
- look for us on Google "iWMTaxAdvisor"

tomki
Posts:39
Joined:Thu Aug 01, 2013 1:48 pm

Re: Shares investments tax

Postby tomki » Wed Jan 13, 2021 6:43 pm

It is possible that someone else can answer your question using the assumption that you are talking about non-quoted or private shares, which actually from a tax viewpoint is much more enticing. Assuming you are talking about quoted shares and are UK resident:-
I am talking for shares of major Companies (Apple, Facebook, Netflix etc etc) that are listed in New York Stock Exchange, Nasdaq and London Stock Exchange also stocks of ETF's.

> I...can you offset re-payment (interest & capital) of borrowing debt against if you make any profit invested in shares ?
No. Having said that, if you invest through a family investment company, and the company borrows, yes, with conditions.

> 2. If you withdraw ... which tax you have to pay Dividend or CGT ?
Irrelevant. You'll pay income tax on interest and dividends and accrued interest whether or not you withdraw it, and same for gains tax. Unless you invest through a tax favoured account.

> 3. Can you offset losses you make from investments against present and future tax years ?
Yes, gains only. You can bring forward unused losses indefinitely.

> 4. If you sell shares and you made profit but you don't withdraw it from broker platform to your account.... do you have to declare this profits or losses while funds are in broker platform ?
Declare, yes.
Most brokers and private banks in the UK will deliver an annual UK tax certificate containing these figures. I am not sure about 'platforms'. By implication HMRC will get these figures declared to them at some point.
[/quote]

tomki
Posts:39
Joined:Thu Aug 01, 2013 1:48 pm

Re: Shares investments tax

Postby tomki » Wed Jan 13, 2021 7:46 pm

SORRY THE ABOVE REPLAY WAS SEND INCOMPLETE.. Please see bellow
It is possible that someone else can answer your question using the assumption that you are talking about non-quoted or private shares, which actually from a tax viewpoint is much more enticing. Assuming you are talking about quoted shares and are UK resident:-
I am talking for shares of major Companies (Apple, Facebook, Netflix etc etc) that are listed in New York Stock Exchange, Nasdaq and London Stock Exchange also stocks of ETF's. Resident of UK for tax purposes.

> I...can you offset re-payment (interest & capital) of borrowing debt against if you make any profit invested in shares ?
No. Having said that, if you invest through a family investment company, and the company borrows, yes, with conditions.
It's not from family investment company, nor through wealth management firm, it's typically from individual investor who borrowed loan for solo purpose to invest in shares. So capital and interest cannot of loan cannot be deducted from gains (if you lucky to have any gains). I thought at least interest of loan is deducted from gains (if you lucky to have any gains).

> 2. If you withdraw ... which tax you have to pay Dividend or CGT ?
Irrelevant. You'll pay income tax on interest and dividends and accrued interest whether or not you withdraw it, and same for gains tax. Unless you invest through a tax favoured account.
Income tax on shares sold, from what I am reading it's either CGT or Dividends. Gains are typically made from buying stock lower price and selling in higher price. Companies hardly send any dividends to investors, and if they do, for retail investor that would amount no more then £200.


> 3. Can you offset losses you make from investments against present and future tax years ?
Yes, gains only. You can bring forward unused losses indefinitely.
So it's not 4 years only ?


> 4. If you sell shares and you made profit but you don't withdraw it from broker platform to your account.... do you have to declare this profits or losses while funds are in broker platform ?
Declare, yes.
Most brokers and private banks in the UK will deliver an annual UK tax certificate containing these figures. I am not sure about 'platforms'. By implication HMRC will get these figures declared to them at some point.
You missed my text - stock is sold and funds are re-invest by buying new shares which might make profit or lose it's value. Funds remains in trading account and you don't withdraw the funds from your broker account.

AGoodman
Posts:1170
Joined:Fri May 16, 2014 3:47 pm

Re: Shares investments tax

Postby AGoodman » Mon Jan 18, 2021 6:05 pm

Nothing you've added changes the advice. In particular:

no, interest on loans taken out to invest in listed companies is not deductible
income tax on interest and divis; capital gains tax on capital gains.
indefinitely
yes, you have to declare and pay tax on profits. it doesn't make any difference whether you withdraw the monies from the broker account or not.

If you are talking about small sums, you can avoid tax completely by investing via an ISA - either single fund or a platform (e.g. II, Hargreaves Landsdown). You can add £20,000 p.a. to a shares ISA.

OR, you have a dividend allowance of £2,000 and capital gains exemption of £12,500 p.a.


Return to “Savings & Investments, Pensions & Retirement”

cron