Shares and CGT?

[Tippman]

This question has appeared in an earlier post but the replies are lost and cannot be retrieved according to the info available, so I'd like to sak it again here:

CGT in relation to buying and selling shares.

I am a PAYE worker for a start. Can I use a simple example and then ask a couple of questions that may help me understand.

Say I bought shares in one irish company on Jan 1st for a total including stamp duty and commision for €10,000.

Say then on Dec 31st of the same year I sold all the shares including stamp duty and commision for €20,000. A €10,000 profit.

My questions are as follows.
1) the goverent has taken a cut via a stamp duty on both the purchases and sale of the shares. Am i right in saying they will look for more in terms of CGT?

2) in relation to the above, what is my exposure given that I am a PAYE worker.

3) Is it up to me to declare the above profit to the tax man or does my irish stock broker do this for me?

4) If my stock broker does not declare it and I say nothing how can they (tax man) find out.

5) If I have to declare it myself can I do it once a year? if do what it the best time? are there set forms or do I just ring the tax man and he sends me a bill?

6) are there any basic tips to help me limit my exposure.

7) are there any links to key posts to help me understansd CGT.

many thanks once again.

 

[ClubMan]

1) the goverent has taken a cut via a stamp duty on both the purchases and sale of the shares. Am i right in saying they will look for more in terms of CGT?

Yes 20% CGT on the €10K profit less your annual CGT allowance of €1,270, less any allowable expenses (e.g. acquisition/disposal expenses and SD), less any previously incurred capital losses if applicable, less indexation relief if applicable etc.

2) in relation to the above, what is my exposure given that I am a PAYE worker.

What do you mean by "exposure"? Your liability is roughly as explained above. CGT is a self assessed tax and the individual is reponsible for declaring, filing and paying by the relevant dates or risk facing the repercussions arising from tax evasion.

3) Is it up to me to declare the above profit to the tax man or does my irish stock broker do this for me?

See previous point.

4) If my stock broker does not declare it and I say nothing how can they (tax man) find out.

There are various ways - e.g. the register of shareholders is a public document so anybody can find out who holds shares other than those held in nominee accounts. They could ask you to make a tax return in which case a false declaration is punishable by severe penalties. And so on...

5) If I have to declare it myself can I do it once a year? if do what it the best time? are there set forms or do I just ring the tax man and he sends me a bill?

See the [broken link removed] for information about the relevant filing and payment dates.

6) are there any basic tips to help me limit my exposure.

Just make sure to apply the calculations roughly outlined above.

7) are there any links to key posts to help me understansd CGT.

See my earlier point about the Revenue website. Ishmael Whale's CGT calculator might also be of use to you.