Re: CGT Calculations
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If they come back with an answer that looks like they have made a mistake and undercooked it, settle quick!<!--EZCODE BOLD END-->
This would be a bad strategy. CGT is a self-assessment tax. The onus is on the taxpayer, not the Revenue, to determine the size of the liability before it is paid. If the Revenue underestimate a liability the taxpayer is still legally obliged to pay the full amount due. Interest (and possible penalties and publication) would apply if an underpayment were unearthed some time in the future
You can find work out the potential tax liability by calculating the approx. amount of the tax due as follows (based on a holding of shares bought before 6/4/74, with no purchases of shares in the meantime)
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Taxable Gain<!--EZCODE BOLD END-->
disposal value of shareholding
Less
(value of shareholding at 6/4/74
x indexation multiplier (2002 disposals) of 7.180)
= Chargeable Gain
Less Annual Exemption of £1000 (shares held singly)
= Taxable Gain
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Tax Due<!--EZCODE BOLD END-->
Tax Due = Taxable Gain x 20%
strader, your aunt should of course get professional advice unless the amounts involved are minuscule. The Revenue will do their best to calculate her liability using the above formula if they are asked, but you cannot expect them to take responsibility for potentially complicated calculations or to offer any sort of advice on how your aunt should plan her affairs to minimise the tax payable on a disposal.
(She need not pay an arm and a leg for such advice. Negotiate rates beforehand with whatever accountant or advisor you choose and feel free to shop around)
ps She should get this advice before selling her shares. It may be much harder to plan effectively to minimise the tax bill after the transaction. (On that point, I very much doubt that the Revenue would give her case much thought before the transaction takes place)
Tommy
www.mcgibney.com