# CGT when trading online



## midasgold (2 Mar 2010)

Hi,
I have an online trading account.

I buy, sell and re-buy shares regularly depending on market conditions etc.

My trading account held 10,000 euro when I opened it.
I had shares in CRH, RyanAir and Aer Lingus.

I sold my Aer Lingus shares recently and with the
proceeds I bought CRH. ( So now I only have CRH and Ryan Air.  ).

Qu1:  Do I have to pay CGT on the Aer Lingus shares I sold ?

I've assumed that I dont because I immediately re-invested.

Qu2:  Is there a set number of days between sell and buying (re-investing)
the proceeds of the sale, allowed to avoid CGT ?


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## jpd (2 Mar 2010)

midasgold said:


> Qu1:  Do I have to pay CGT on the Aer Lingus shares I sold ?
> 
> I've assumed that I dont because I immediately re-invested.
> 
> ...



Q1: if you made a profit, the gain are liable to tax. Reinvesting does not affect the liability to tax, but can affect the ability to offset losses.

Q2: No, but if you repurchase the same shares within 4 weeks , losses can only be offset against gains on the same shares.

See leaflet here http://www.revenue.ie/en/tax/cgt/leaflets/cgt2.pdf


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## Darragh01 (6 Mar 2010)

Nice things to know about. These questions are certainly helpful for all who wants to know the answer.   The best online trading understanding takes place because people are saving their money, saving their time and holding all the authority of their own financial future in their own hands.


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## Setanta12 (6 Mar 2010)

I think the OP must be careful here.

Depending on numbers and types, frequencies of trades etc - Income Tax rather than CGT could apply.


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## strmin (6 Mar 2010)

Setanta12 said:


> I think the OP must be careful here.
> 
> Depending on numbers and types, frequencies of trades etc - Income Tax rather than CGT could apply.



Incorrect. Just read CGT leaflet on revenue website.


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## smiley (6 Mar 2010)

You will have to pay INCOME TAX in your situation.


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## mercman (6 Mar 2010)

smiley said:


> You will have to pay INCOME TAX in your situation.



How do you determine that based on the information provided ??


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## Setanta12 (7 Mar 2010)

If a trade is being carried on, Income tax applies. 

It's a 'question of fact' if a trade is being carried on.


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## mercman (7 Mar 2010)

Very often challenged and very often won. And that is a case of fact.


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## galwegian44 (8 Mar 2010)

mercman said:


> Very often challenged and very often won. And that is a case of fact.


 
Can you explain when Income Tax is applicable over Capital Gains Tax? Is it based on frequency of trades (i.e. Daytrader) or some other criteria? 

If so, how can it be challenged?

Thanks.


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## mercman (8 Mar 2010)

iqon77 said:


> if you profit that is being made is fairly low why pay any tax in the 1st place.. its not as if the revenue will be chasing you if you made € 500 profit... or will they ?
> I know plenty of ppl that buy and seel shares, modest profit, they dont pay any tax..



Pure lunacy at its best. So you are saying that you might as well have an audit in X number of years and pay interest, double Tax and surcharges. This kind of statement beggars belief.


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## smiley (8 Mar 2010)

iqon77 said:


> if you profit that is being made is fairly low why pay any tax in the 1st place.. its not as if the revenue will be chasing you if you made € 500 profit... or will they ?
> I know plenty of ppl that buy and seel shares, modest profit, they dont pay any tax..



Any day now revenue will announce a tax audit in relation to non payment of tax on dividends and cgt.

A lot of people will be caught.


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