Very well written thread. I'm new to trading and i've just bought my first load of shares and found this v helpful.
If say you buy 10,000 Bank Of Ireland shares at €1 each and sell them at €2, making 20,000 overall profit. I understand you pay 20% capital gains tax on the €10,000 profit (minus the €1270 allowance) so your overall profit =
Profit €10,000
minus €1270
= €8730 on which 20% tax must be paid = total of €6984 profit
Initial €10,000 + €6984 = €16984 in your bank account with everyone paid.
Now say the share price went down to €1 again and you bought 16984 shares with your €16984 and kept them again till they hit €2 and sell them for (2 x 16984) = €33968
Heres where i'm not sure what happens. Is it calculated as follows can someone help me out
Total money now in account €33968
minus your inital capital before last transaction 16984
(33968 - 16984) = €16984 which is the gross profit on the last transaction. I understand you can only use the €1270 allowance once in any given year? so i'll take the capital gains tax off the €16984 profit (16984/100x80) = €13587.20
I then add this €13587.20 to my inital imput for that transaction of €16984 which gives me €30571.20 total in my bank account with everyone paid.
Am i right in this?? I started with €10,000 and with this very lucky buy and selltiming i would now have €30,571 with everyone paid and owe no further tax? (i've left out commission, stamp duty for clarity purposes btw)
I can then buy again if the share price went down and sell if they went up and so on and so on. Have i calculated the tax i owe to the governement right here. I'm new to share dealing so please excuse me but am i right in the way i've calculated things here. I wouldn't owe vat or income tax or anything like that and i've calculated how much capital gains tax i'd owe correctly here. I intend making 10 or 20 transactions like the above in a year with the same shares.
Have i calculated this right or is there something blatently wrong in my profit calculations?
Thanks
Qazxsw
If say you buy 10,000 Bank Of Ireland shares at €1 each and sell them at €2, making 20,000 overall profit. I understand you pay 20% capital gains tax on the €10,000 profit (minus the €1270 allowance) so your overall profit =
Profit €10,000
minus €1270
= €8730 on which 20% tax must be paid = total of €6984 profit
Initial €10,000 + €6984 = €16984 in your bank account with everyone paid.
Now say the share price went down to €1 again and you bought 16984 shares with your €16984 and kept them again till they hit €2 and sell them for (2 x 16984) = €33968
Heres where i'm not sure what happens. Is it calculated as follows can someone help me out
Total money now in account €33968
minus your inital capital before last transaction 16984
(33968 - 16984) = €16984 which is the gross profit on the last transaction. I understand you can only use the €1270 allowance once in any given year? so i'll take the capital gains tax off the €16984 profit (16984/100x80) = €13587.20
I then add this €13587.20 to my inital imput for that transaction of €16984 which gives me €30571.20 total in my bank account with everyone paid.
Am i right in this?? I started with €10,000 and with this very lucky buy and selltiming i would now have €30,571 with everyone paid and owe no further tax? (i've left out commission, stamp duty for clarity purposes btw)
I can then buy again if the share price went down and sell if they went up and so on and so on. Have i calculated the tax i owe to the governement right here. I'm new to share dealing so please excuse me but am i right in the way i've calculated things here. I wouldn't owe vat or income tax or anything like that and i've calculated how much capital gains tax i'd owe correctly here. I intend making 10 or 20 transactions like the above in a year with the same shares.
Have i calculated this right or is there something blatently wrong in my profit calculations?
Thanks
Qazxsw