Capital Gains Tax and fees on share sales

Z

zisdead1

Registered User
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3
Hi

My query might be best explained by way of an example.

I buy 10 shares in Company A for 10.70e (50 cents are brokers fees 20 cents is stamp)
I now sell these 10 shares in Company A for 20.50e (50 cents are brokers fees)

so my gain is 10 euro (ignoring the fees and stamp)

I have to pay Capital gains tax now,however am I allowed do the following (10.00 e - 1.00 e)
i.e only pay capital gains tax on 9 euro as hopefully you can write of stock brokers fees and commision against your initial gain that was accumulated as part of the buy and the sell.

To take this a step further can I add up all my years Stock broking fees and commissions and deduct them from my overall total profit on any share sales before I make my Capital Gains calculation

Thanks in advance.

Z.
 
You take the commission and stamp duty attributable to a disposal and the acquisition of the relevant shares and take them off the gain.
 
The example seems wrong as your gain cannot be €10 whether you are quoting gross or net amounts. If they are net amounts, then you just subtract one from the other to give the net gain which is taxable:

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In general, just take the net value of each transaction after fees and commissions. You shouldn't have to total anything for the year other than your net gains. Note that you can't write off any non-transaction-specific charges such as account maintenance or custody fees. And don't forget you have a €1,270 annual tax free allowance.
 
Techhead said:
I didnt realise I could subtract transactional fees and stamp duty. Makes sense.
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Otherwise you'd be paying tax on tax (CGT on stamp). Anyone with an online trading account should be getting a statement showing the net amount paid on acquisition and net amount received on disposal. You only have to worry about the difference between the two for tax purposes.
 
How about currency fees, can they be removed from the taxable gain also? Using the example above, if the sell price of 21 above was in dollars, and upon receiving the money to my Euro bank account here I got net 19, can I use this as my net sell price (including bank fees etc)?
 
If you have a euro trading account and buy shares in another currency, so that your broker does the conversion at point of acquisition, and then converts back to euro at point of disposal, then all you have to worry about is the net purchase price in euro versus the net sale price in euro. Stamp duty, commission and FX charges can be ignored.

If you converted euros to, say, dollars to place in a dollar account from which you bought and sold shares, i.e. the FX trade was separate to the share trade, then you have to account for it separately. There are two separate gains/losses -- the share trade, with amounts converted to notional euros on the day of trade, and the FX trade which may involve different dates and exchange rates. See this Revenue note: "Foreign Currency Gains/Losses arising otherwise than in the course of a trade". I presume you can allow for FX margins and commissions, but not general account fees.
 
Be aware that in Ireland you can take E1,270 of gains tax free each year.
i.e. the first 1,270 of any capital gains realised each year is tax free.
 
AJAM said:
Be aware that in Ireland you can take E1,270 of gains tax free each year.
i.e. the first 1,270 of any capital gains realised each year is tax free.
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It hasnt changed in many years so effectively ireland charges more and more in capital gains taxes, "viva la republic", ireland well on its way to a socialist republic
 
joe sod said:
It hasnt changed in many years so effectively ireland charges more and more in capital gains taxes, "viva la republic", ireland well on its way to a socialist republic
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Ireland is a socialist republic. It ticks all the boxes.

The lack of any indexation means that CGT is effectively a tax on inflation. If you bought an asset 10 years ago and it simply held its value in real terms, it would be priced at about 20% more in current currency, meaning a 7% CGT hairtcut when its sold. Its a wealth tax by stealth, which has the unfortunate unintended consequence of freezing asset sales, to the detriment of the economy in general.
 
It's populist idiocy on a grand scale.

The CGT take would go through the roof if the rate was cut to 20%.

It happened before when Charlie McCreevy did just that.

The difference now is the extraordinary amount of legitimate tax avoidance around share and asset sales.
 
joe sod said:
It hasnt changed in many years so effectively ireland charges more and more in capital gains taxes, "viva la republic", ireland well on its way to a socialist republic
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The fact it's €1270 should indicate how long it has been since it was changed. It used to be 1000 punts until we moved to the euro when it converted over to €1270. So, it hasn't changed in at least 15 years.
 
Connard said:
The fact it's €1270 should indicate how long it has been since it was changed. It used to be 1000 punts until we moved to the euro when it converted over to €1270. So, it hasn't changed in at least 15 years.
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It's much worse than that. The exemption was increased from £500 to £2,000 35 years ago, in the Finance Act of 1982. Then it was reduced to £1,000 in 1992. And there it has stayed for 25 years, apart from there used to be an allowance for indexation ... but that also disappeared in 2002. Admittedly for a while in the 80s there were three rates of CGT -- 60%, 40% and 30% for assets held for under 1 year, 1 to 3 years, and over 3 years.
 
dub_nerd said:
It's much worse than that. The exemption was increased from £500 to £2,000 35 years ago, in the Finance Act of 1982. Then it was reduced to £1,000 in 1992. And there it has stayed for 25 years, apart from there used to be an allowance for indexation ... but that also disappeared in 2002. Admittedly for a while in the 80s there were three rates of CGT -- 60%, 40% and 30% for assets held for under 1 year, 1 to 3 years, and over 3 years.
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Wow, that is much worse. €2540 back in 1982 is worth €6800 in today's money. Some difference.
 
Connard said:
Wow, that is much worse. €2540 back in 1982 is worth €6800 in today's money. Some difference.
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It would have been ok had they kept indexation. Only gains above the rate of inflation would have been counted as taxable. Up to 2003 you would use Revenue's CGT multiplier, which would tell you that an asset bought in the 82/83 tax year for €2,540 and disposed of in 2003 was not liable for CGT unless sold for more than:

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You would then have your €1,270 exemption on top of that.
 
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Trying to work out my Rabobank potential exit tax. Can I offset losses made in previous years against gains in current year? For example, if invested in a fund which lost money in 2012 and I sold that fund in 2013, can I offset that loss against any other gain in 2013? I have multiple purchases and sales of funds for the past 10 years and it is extremely difficult to determine the CGT based on current information.
 
Quick follow up question... what about disbursement fee from us trader account to my Irish account on sale of share? Can I include this on charges to reduce my gain?

I don’t know the exact euro amount of the charge. Best guess based on rates that day ok?
 
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