# How to calculate your profit / loss of Shares



## strat_640 (17 Feb 2009)

Hi all, 

I am new to this game and am just trying to clarify (settle the voices in my head) a few things. I have recently opened a sharewatch account; I know but said I would give them a go! I have yet to invest any money but have a small amount (~2.5K). The way I see it is:

1. Buy shares @ (for arguments €1.00) in "X"
=> 2500 shares in "X"
=> Pay fee at .3% (€7.50)
=> Do you also pay 1% gov tax on the €2500??

2. Share price for "X" goes to (fingers crossed but again hypothetical) €1.50
=> 2500 shares at €1.50 = €3750
=> Pay fee at .3% (€11.25)
=> Pay 1% tax (€37.50)
=> Cost of deal (fee + tax) = €48.75

Deal worth 
=> €3750 (selling price) - €2500 (initial investment) - €48.75 (Fee) = €1201.25 (33% profit!)

Again, values are fanciful but if you could have a look at the above and tell me if I am missing something I would really appreciate it!

Strat_640


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## strat_640 (17 Feb 2009)

Sorry, the 1201.25 net should also be reduced by €7.50 for the inital fee for buying! Just noticed it there!


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## demoivre (17 Feb 2009)

If you're buying Irish shares the 1% stamp duty only applies to the* purchase* of the shares.


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## strat_640 (17 Feb 2009)

Cheers, was not sure about that, how does the rest look. Am I on the money (so to speak!).


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## demoivre (17 Feb 2009)

strat_640 said:


> Cheers, was not sure about that, how does the rest look. Am I on the money (so to speak!).



I would calculate as follows:

Outlay :   2500x1x1.01 + 2500x.003 = €2532.5

Proceeds: 2500x1.5 - 3750x.003      = €3738.75

Profit :     €3738.75 - €2532.5         = €1206.25


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## strat_640 (17 Feb 2009)

Ok, but just looking at that, I am guessing that the profit that you show should not include the .3% fee? Anyway, i appreciate the reply, think I have a handle on what the process is and have done up a handy Excel package for calculating profit/loss.

Happy Trading!


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## demoivre (17 Feb 2009)

strat_640 said:


> Ok, but just looking at that, I am guessing that the profit that you show should not include the .3% fee? Anyway, i appreciate the reply, think I have a handle on what the process is and have done up a handy Excel package for calculating profit/loss.
> 
> Happy Trading!



Your calculation is incorrect - you should be *adding *the .3% commission to the outlay - that's the way brokers present it on a contract note ie cost of shares including stamp duty where applicable *plus *their commission for doing the deal is what you will have deducted from your account. Then when the broker sells the shares on your instructions they will *subtract* their commission for doing the deal and credit your account with the balance.


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## TomOC (17 Feb 2009)

Are there also minimimum charges involved.  Is there a min charge for buying irish shares on sharewatch of about 20 Euro plus a yearly charge of 60 euro?  Mabey I am totally incorrect on this though?


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## cisco (18 Feb 2009)

I am thinking about opening a share trading account with ODLS in the UK
does anyone have any experience of them.

if i buy share with them and they hold them in a nominee account for me
do i still have to pay stamp duty and tax.


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## demoivre (18 Feb 2009)

cisco said:


> I am thinking about opening a share trading account with ODLS in the UK
> does anyone have any experience of them.



I have had an account with them for around ten years - no major problems. I only use them for share buying/ selling. Not sure if they are the cheapest but I like their charting software so have stuck with them - Some realtime feeds are free if you trade once a month which is important to me.



> if i buy share with them and they hold them in a nominee account for me
> do i still have to pay stamp duty and tax.



Stamp duty on shares and any tax liability you may have resulting from share dealing is independent of the broker that you use and the way the shares are held..


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## strat_640 (19 Feb 2009)

> Are there also minimimum charges involved. Is there a min charge for buying irish shares on sharewatch of about 20 Euro plus a yearly charge of 60 euro? Mabey I am totally incorrect on this though?


 
As far as I am aware, there is just the yearly fee of 60euro. I am still awaiting for my password so that I can begin trading so my experience is pretty limited!!

I guess, once I complete a trade then I will be able to confirm all related charges. Once I have this, I will get back and try and post up an easy to understand calculation.


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## Petal (20 Feb 2009)

Educating myself at the moment. don't forget that your profit is taxable at ~23%.


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## qazxswedc (23 Feb 2009)

Petal said:


> Educating myself at the moment. don't forget that your profit is taxable at ~23%.


 I thought capital gains tax is 20%

Where are you getting the other 3%

Do you pay income tax on profits from selling shares btw?


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## WaterSprite (23 Feb 2009)

qazxswedc said:


> I thought capital gains tax is 20%
> 
> Where are you getting the other 3%
> 
> Do you pay income tax on profits from selling shares btw?



Capital gains tax was increased to 22% at the last budget.  DIRT was raised to 23%.


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## qazxswedc (23 Feb 2009)

Do you only pay dirt once a year on the total accumalated profit in your bank account. Shur you dont have to pay dirt every time you make a profit on every transaction. In other words if i made 10 profitable transactions in a year and then in the last month lost everything shur i'd pay no dirt at all then. Would i even pay capital gains tax?


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## WaterSprite (23 Feb 2009)

qazxswedc said:


> Do you only pay dirt once a year on the total accumalated profit in your bank account. Shur you dont have to pay dirt every time you make a profit on every transaction. In other words if i made 10 profitable transactions in a year and then in the last month lost everything shur i'd pay no dirt at all then. Would i even pay capital gains tax?



I only mentioned the 23% DIRT because someone referred to "23%" and that's where I thought some confusion could come in.

DIRT is usually deducted directly by your bank.

I think you are referring to transactions attracting CGT, where the rate is 22%.  You can offset capital losses against capital gains.


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## qazxswedc (23 Feb 2009)

WaterSprite said:


> I only mentioned the 23% DIRT because someone referred to "23%" and that's where I thought some confusion could come in.
> 
> DIRT is usually deducted directly by your bank.
> 
> I think you are referring to transactions attracting CGT, where the rate is 22%. You can offset capital losses against capital gains.


 Ah ok.

If i made €10,000 profit on sharedealing in my bank account by the end of the year i would then come along and pay CGT 22% giving me a profit of (10000/100x78) = €7800
I would then pay 23% dirt tax on this €7800 which would give me a grand total profit of €6006?

I then pay no further tax at all is it and keep €6006?


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## WaterSprite (23 Feb 2009)

qazxswedc said:


> Ah ok.
> 
> If i made €10,000 profit on sharedealing in my bank account by the end of the year i would then come along and pay CGT 22% giving me a profit of (10000/100x78) = €7800
> I would then pay 23% dirt tax on this €7800 which would give me a grand total profit of €6006?
> ...



I think I may have confused matters even more by even bringing up DIRT - sorry.  DIRT is payable on deposits in your bank account, regardless of how you made that money and regardless of the net position at the end of the year.  For example, if you had €10k in your account on Jan 1st and took it all out on December 1st (thus having no money in your account at year end), you would still be charged DIRT (and it is automatically deducted by the banks usually) for the interest earned for the 11 months.  DIRT and CGT are two totally different taxes and talking about them together isn't really relevant.

If you made €10k from share dealing in a year and had no other gains or losses, you take off your CGT exemption for the year (€1270) and then pay 22% on the difference.  Note that you would have to pay preliminary CGT during the year also.  Have a look at the Revenue site for information on both DIRT and CGT - they can explain it better than I can!


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## Petal (23 Feb 2009)

Opps, sorry, that was me, I put a ~ before the 23 because I wasn't entirely sure, but knew it was thereabouts!


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## TomOC (23 Feb 2009)

What costs are deductible from CGT due? 
1 Brokers fees
2 How about Stamp Duty?

When calculating CGT owed can I deduct Stamp duty paid (on share purchases) as an expence?

If I make a loss one year on share trading, can I carry this loss to the following year to negate stamp duty payable?  How long can losses be carried on?


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## strat_640 (24 Feb 2009)

Wow! 

I think I have opened up a can of worms! Well I am a bit more confused once again! Starting to get a bit scard about this trading online craic! Looks to me that you would have to make some serious profit on salling shares to come out with any money! 

So what do ye think? Is it worth doing?!!


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## qazxswedc (24 Feb 2009)

Not true


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## qazxswedc (24 Feb 2009)

Thanks watersprite thats cleared that up alot for me. DIRT is only payable on interest from deposits not actual deposits themselves so no profit made from share dealing is liable to DIRT except the interst earned from the profit while the money is lying in the bank account.

Strat, assuming i'm right you basically pay more or less 23 maybe 24% on any profit you make from sharedealing. This allows for 22 CGT  then stamp duty(only when buying) and then commission fees for when you both buy and sell. Therefore i think i'm right in saying that if you want to get an idea of how much profit you make make from share dealing just take roughly one quarter off your profit. That still leaves three quarters which is pretty good. remember you only pay CGT on actual profit you make. Your initial imput of money is not taxable.

So if you buy 100,000 shares at €1 each and sell them at €1.20 each you make roughly €15000 into your hand, everyone paid, profit.


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## strat_640 (24 Feb 2009)

Ok, then the only other thing that I am unsure of is how do i pay this tax? Is it all done automatically of do i have to declare the profits and pay the tax at teh end of the year? The last thing I want is a tax bill that i have not allowed for at the end of the year?!

Also, are we able to attach a program. i have one done based on what I have read. Would like to share it if ye think it works alright?


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## TomOC (24 Feb 2009)

strat_640 said:


> Ok, then the only other thing that I am unsure of is how do i pay this tax? Is it all done automatically of do i have to declare the profits and pay the tax at teh end of the year? The last thing I want is a tax bill that i have not allowed for at the end of the year?!
> 
> Also, are we able to attach a program. i have one done based on what I have read. Would like to share it if ye think it works alright?


 
Gains are declared through Form 11 (even if no tax due as less than CGT limit of 1270) ( This may have to be declared by 31 October of following year -not sure though).  Payment date is depends on when profit made

On CGT payslip A you pay 
"The amount of tax due on capital gains made by you on disposals in the period 1 January 2008 to 30 September 2008" 
This is payable by October 31st of that year

On CGT Payslip B you pay 
"The amount of tax due on capital gains made by you on disposals in the period 1 October 2008 to 31 December 2008"

This is payable by 31st January of the next year.  I assume dates will be the same roughly for this year?

Not positive on details above. Check the revenue website for more

Also I repeat my  question to anyone who knows more info on question below

What costs are deductible from CGT due? 
1 Brokers fees
2 How about Stamp Duty?

When calculating CGT owed can you deduct Stamp duty paid (on share purchases) as an expence?

If I make a loss one year on share trading, can I carry this loss to the following year to negate stamp duty payable? How long can losses be carried on? I read somewhere else that they can be carried indefiniately, is this true?  Also if I only sell half of the shares bought, how do I calculate the profit made and hence CGT due?  Want to know all these details before buying.  Any help would be great.

Strat 640, it would be great if you could attach this, not sure if possible


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## TomOC (24 Feb 2009)

strat_640 said:


> Ok, then the only other thing that I am unsure of is how do i pay this tax? Is it all done automatically of do i have to declare the profits and pay the tax at teh end of the year? The last thing I want is a tax bill that i have not allowed for at the end of the year?!
> 
> Also, are we able to attach a program. i have one done based on what I have read. Would like to share it if ye think it works alright?


 
In short (as opposed to my large complicated explanation above!), no it is not done automatically, you must declare yourself.  Its declared on form 11 and paid through CGT payslip A or B depending on what time of year the shares were sold (I think!).


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## qazxswedc (24 Feb 2009)

TomOC said:


> In short (as opposed to my large complicated explanation above!), no it is not done automatically, you must declare yourself. Its declared on form 11 and paid through CGT payslip A or B depending on what time of year the shares were sold (I think!).


 You would prob be best set keeping an account of what you sold and when and what you bought. I understand you dont have to keep the CGT tax due to one side or anything during the year. You can gamble this as well on the stock market cos if you lose you wont owe CGT cos you haven't made an overall gain and can offset your losses against any wins you have.
Best thing is keep a record of everything, make an appointment with an accountant and make sure everything is in order before you write a cheque to the revenue for any CGT you might owe.


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## TomOC (24 Feb 2009)

qazxswedc said:


> You would prob be best set keeping an account of what you sold and when and what you bought. I understand you dont have to keep the CGT tax due to one side or anything during the year. You can gamble this as well on the stock market cos if you lose you wont owe CGT cos you haven't made an overall gain and can offset your losses against any wins you have.
> Best thing is keep a record of everything, make an appointment with an accountant and make sure everything is in order before you write a cheque to the revenue for any CGT you might owe.


 

For a young guy at 24 I am naive and feel that an accountant is only a waste of money, someone to take my profit! This will work ok till revenue tell me I have made an incorrect declaration!

I am also not sure if I owe 2000 euro in CGT which I pay before end october that year via payslip a, and then make a loss and am owed CGT of 1000 later in year, do revenue give me back the extra 1000 euro if I apply to get it back?


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## qazxswedc (24 Feb 2009)

Dont pay any CGT till the very end. If your dealing with 1000's it set you right to make an appointment with an accountant. But no need till october in my opinion.


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## roro123 (25 Feb 2009)

Please delete already referred to above, only repeating myself


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## strat_640 (26 Feb 2009)

Woo this is getting complicated! I think I will have to ask an accountant! Its a bit annoying though as when i asked sharewatch (twice) all they mentioned it that i pay the fee on price bought and sold plus the 1% Stamp. When I asked about FIRT they said no?? Should they not be obliged to mention this??

Sorry, dont seem to be a way of posting the excel program?!


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## strat_640 (26 Feb 2009)

Sorry, DIRT!


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## WaterSprite (26 Feb 2009)

strat_640 said:


> Woo this is getting complicated! I think I will have to ask an accountant! Its a bit annoying though as when i asked sharewatch (twice) all they mentioned it that i pay the fee on price bought and sold plus the 1% Stamp. When I asked about FIRT they said no?? Should they not be obliged to mention this??
> 
> Sorry, dont seem to be a way of posting the excel program?!



In fairness, it's not sharewatch's job to inform you of your tax obligations.  They are only talking about their fees (the commission plus stamp duty).  You only pay DIRT on the interest earned on deposits - likely to be tiny, if not non-existent, in any cash you may have in a sharewatch account.  DIRT is usually deducted at source too so you are unlikely to have to worry about it.

What you do need to know more about is CGT - suggest you take a look at the revenue booklet on CGT as it has all the relevant information and is very comprehensive.


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