Is this right do i keep paying CP tax over and over again Arrgghhh!

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

Initial comments: the CGT rate is now 22% not 20%. So you would end up with €8,079.40 profit in the bank after paying tax. That's 10,000 less 22% of 8730.

"I intend making 10 or 20 transactions like the above in a year with the same shares."
I intend to win the lotto this year, and ask Cameron Diaz out for a date! I don't think your biggest problem is going to be working out how much tax you're going to have to pay on your gains. Have you not been reading the papers lately???

I'm no tax expert but as far as I know you pay capital gains on each sale of the shares if any profit is made. The capital gains tax allowance is for the year overall. You can offset the gains made against losses on other share transactions.

bogle said:

I'm no tax expert but as far as I know you pay capital gains on each sale of the shares if any profit is made. The capital gains tax allowance is for the year overall. You can offset the gains made against losses on other share transactions.

Click to expand...

I would agree with Boogle and say CGT would have to be paid on each sale of shares. Any losses can be subtracted from the CGT bill along with brokers charges and costs.

However do the costs that can be subtracted (from CGT owed) include stamp duty? Is stamp duty at ~1%?, payable on purchase and sale of shares?

Good luck with your trading qazxswedc, think it may be tougher than expected. Am looking at similar myself, there was ~450% to be made on these shares about a month ago over a period of a few days (less than a week). However they are so volatile the 30000 (or more) could be at 0 very quickly. Have on my mind about 2000 and try to take out capital plus profit when increased 1 or 2 hundred %. And leave in some for life and watch it grow or die. However these shares could die very quick with all loss and no profit. As Liamos said we may not have to worry about how much tax we pay just how much money lost.

Liamos said:

I intend to ask Cameron Diaz out for a date!

Click to expand...

She wont go out with you she said your too ugly.

Thanks tom. I know its risky but potential profit outweighs initial capital imput loss in my opinion when such profit can be made.
Stamp duty is only paid on purchase of the shares. no stamp duty is paid on selling them btw.