Capital Gain Calculation

[harvey]

I am trying to work out Capital Gains calculation for someone:

500 shares bought with pretaxed income in Employee SOS 3 years ago:
500 x 6.35 (old share price)= 3175

3 years later, maturity, if the proceeds are cashed in what is the capital gains liability ? There is no income tax payable.

500 x 12.00 (new share price) = 6000

Assume married and no allowances used.

Is it 6000 - 3175 = 2825-1270 (CGT allowance) = 1555 x 20% = 311 ?

 

[asdfg]

Is it 6000 - 3175 = 2825-1270 (CGT allowance) = 1555 x 20% = 311 ?

Looks right. Are there are costs associated with selling Stamp duty etc? These expense are allowed

Why not sell 400 shares now and the remainder next year and pay no CGT. Just a thought

 

[ClubMan]

There is no income tax payable.

You mean that there was no discounted price involved in the purchase? Many (most?) Employee Share Option Plans involve offering shares for purchase at a discounted price to the market value which implies some income tax liability. Perhaps your employer's scheme does not?

Assume married and no allowances used.

If you haven't sold them yet then transfer enough to your spouse's name to use his/her annual CGT allowance if not otherwise used. This should cost nothing (or a nominal amount) and no stamp duty applies.

If you have any previously incurred capital losses you can offset these against your CGT liability.

 

[harvey]

You mean that there was no discounted price involved in the purchase? Many (most?) Employee Share Option Plans involve offering shares for purchase at a discounted price to the market value which implies some income tax liability. Perhaps your employer's scheme does not?

If you haven't sold them yet then transfer enough to your spouse's name to use his/her annual CGT allowance if not otherwise used. This should cost nothing (or a nominal amount) and no stamp duty applies.

If you have any previously incurred capital losses you can offset these against your CGT liability.

I understand that the original purchase price was discounted by about 10-15%.

How would one transfer to spouse ? Get a cert. and then transfer ?

 

[ClubMan]

I understand that the original purchase price was discounted by about 10-15%.

If that was the case then income tax on the BIK (and possibly PRSI?) attributable to the gain from the discounted price was due at the time (30 days after exercise) unless other rules applied. See here.

How would one transfer to spouse ? Get a cert. and then transfer ?

How do you hold the shares (certificates, electronically etc.)? In general it should be simply a case of getting the relevant transfer (CREST in the case of ISE/LSE quoted shares but presumably something else on US exchanges) from the company, its registrar, a broker or the stock exchange and effecting the transfer. There may be a nominal administration fee but there should be no transaction charges or Irish stamp duty. See here.

 

[Bramble]

If you have any previously incurred capital losses you can offset these against your CGT liability.

Can I ask about this? I have just sold some shares, making (I think) approx. €2400, so presumably I'd be liable for CGT of (2400-1270)*20% = €226.
But last year I sold shares and made a loss of €187 approx.

How does that affect my CGT bill?

Thanks for any help - I'm finding this kinda complicated!
Bramble

 

[bazermc]

You must use your losses brought forward before the annual exemption
So you will have a gain of €2,400 less your losses of €187 less the annual exemption €1,270 taxable therefore is €943 at 20% equals €189

 

[clti]

In terms of using 2 CGT allowances of 1270 each for a couple...I bought some shaes 5 years ago as a single person, got married, and we now have a joint NIB custody account where the shares are held, in both names, and from where we plan to sell some soon. Does a CGT of 2*1270 apply or will I need to transfer shares to my wife as discussed in this thread? Thanks for the time.

 

[ClubMan]

Whose names are the actual shares in if this is different from the names on the custody account? If the shares are held in joint names then I believe that you can use both CGT allowances.

 

[clti]

Clubman, thanks for the reply. I sent details to NIB when we started with them regarding what I owned in my Crest AIB account. We bought some shares since then thru our joint NIB custody account and the paperwork has both names. When we sell the old shares, now with NIB, I have no doubt we will get paperwork with the joint names. Will this be enough for the tax man? Hopefully it will. Thanks for your time.

 

[roker]

Can you please explain the annual exemption. I had several hundred euro loss about two year ago because a compamy wound up. I have not yet sold any other shares.