How to calculate your profit / loss of Shares

S

strat_640

Registered User
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15
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
 
Sorry, the 1201.25 net should also be reduced by €7.50 for the inital fee for buying! Just noticed it there!
 
If you're buying Irish shares the 1% stamp duty only applies to the purchase of the shares.
 
Cheers, was not sure about that, how does the rest look. Am I on the money (so to speak!).
 
strat_640 said:
Cheers, was not sure about that, how does the rest look. Am I on the money (so to speak!).
Click to expand...

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
 
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!
 
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!
Click to expand...

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.
 
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?
 
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.
 
cisco said:
I am thinking about opening a share trading account with ODLS in the UK
does anyone have any experience of them.
Click to expand...

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.
Click to expand...

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..
 
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?
Click to expand...

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.
 
Educating myself at the moment. don't forget that your profit is taxable at ~23%.
 
Petal said:
Educating myself at the moment. don't forget that your profit is taxable at ~23%.
Click to expand...
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?
 
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?
 
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?
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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.
 
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.
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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?
 
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 then pay no further tax at all is it and keep €6006?
Click to expand...

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