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Capital Gains 1.On shares ,is there any distinction in the

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Capital Gains
1.On shares ,is there any distinction in the UK between short term gains ( less than a year ) and longer ? I'm sure there used to be , but I've been abroad for 35 years .
2. If I sell a watch (inherited abroad 25 years ago - no value attributed ) for £50,000 , is there any tax due ?
2a) If so, can I offset this by realising shares at a loss ?
Submitted: 3 years ago.
Category: Tax
Expert:  Sam replied 3 years ago.

Hi

 

Thanks for your question, I am Sam and I am one of the UK tax experts

 

 

1.On shares ,is there any distinction in the UK between short term gains ( less than a year ) and longer ? I'm sure there used to be , but I've been abroad for 35 years . Only the 30 day rule, which changed to stop the same day purchase and sell to realise a gain - which use to be more commonly known as bed and breakfast!

 

2. If I sell a watch (inherited abroad 25 years ago - no value attributed ) for £50,000 , is there any tax due ? Yes, but the first £6000 is exempt, as this is deemed to be a personal chattel. Then capital gains are due on the balance.

 

2a) If so, can I offset this by realising shares at a loss ? Yes - the loss would be applied first, then the annual exemption allowance (currently £10,900 and to increase to £11,100 after 06/04/2014) then any remaining gain would be liable to capital gains tax.

 

 

However, if you sell, and are still resident abroad, (and would have been for at least 5 years, during which the sale takes place) then as long as you sell before the tax year that you return to the UK, then you avoid UK capital gains - but then would have to consider the capital gain position in your country of current residence.

 

 

Thanks Sam

Customer: replied 3 years ago.

I qualified as an ACA in 1970, and became a finanial controller , rather than tax expert . But didn't short term gains get added to income at some stage ?


Thanks


tony


I am reresident in Uk now , having retired a few years back

Expert:  Sam replied 3 years ago.
Hi Tony

Thanks for your response

Not for as long as I have been practising tax - other than the rules indicated above (have been trading as accountant since 2008 and previously worked with HMRC for 26 years, although first 4, just at officer level)

And as a UK resident then, the gain to consider would be considered here in the UK

Thanks

Sam
Customer: replied 3 years ago.

OK then .


As will Rogers said - it's not what you don't know that gets you , it's what you know that ain't so !


 


How about if I gave shares in the watch to my wife & 3 children - two of whom are resident abroad .


the watch is being auctioned , and I don't know how much it will fetch .


tony

Expert:  Sam replied 3 years ago.
Hi Tony

Thanks for your response and isn't that the truth !

If you gift anything to your children then a capital gain position arises at the time of the transfer, but any gift to your wife (assuming you are still together as a married couple) will be treated as exempt, as no loss/gain is deemed to have been made with spousal transfers.

Plus - a word of warning - I you make the transfer to your wife in the same tax year in which the watch is sold, then HMRC may refute the position, arguing that the transfer was made with the sole purpose to avoid capital gains, So if you go sown this route, then transfer now, and do not sell until after 05/04/2014, so they are separated by a tax year -



Thanks

Sam

Customer: replied 3 years ago.

Thanks Sam .


I suppose I need to maintain that I gifted the watch to my children when I was non resident , and am only now selling it on their behalf .


We'll forget foreign tax aspects.


To me it was just an old watch ...


Already booked in to auction this tax year .


How many questions have i got left ?? thanks


tony

Expert:  Sam replied 3 years ago.
Hi

Thanks for your response

If you can provide evidence (if asked for) to HMRC that this gift was made earlier, and also have considered the Inheritance tax implications which is a whole new topic!!

In essence any new topic has to be listed as a new question with a new amount offered after accepting/rating the first (if you are happy with the service of course) OR you can ask further question, with the offer of adding a bonus you feel is suitable for the expertise you seek.
So as long as the original question has been answered fully - then that's the fee offered used up.

Thanks

Sam

Customer: replied 3 years ago.

Sam , I think you've sorted me .


I'll have to make my decisions depending on what it realises .


Good night !


Thanks a lot


Tony

Expert:  Sam replied 3 years ago.
Hi Tony

You are very welcome - and if you could rate/accept, it would be much appreciated, as I an then credited for my time

Thanks

Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13863
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
Sam and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

Wikipedia tells us that:

'Channon observes that one of the primary drivers to the introduction of CGT in the UK was the rapid growth in property values post World War II. This led to property developers deliberately leaving office blocks empty so that a rental income couldn't be established and greater capital gains made.[27] The capital gains tax system was therefore introduced by Chancellor, James Callaghan in 1965.'

Almost as soon as the administration changed Selwyn Lloyd introduced the concept of short and long terms capital gains, partly to curb excessive untaxed profits on LSE transactions. This split didn't last that long!
Customer: replied 3 years ago.

Thanks , but Im done on this question now !


I think I saw this article too in the internet .


Hope i'm not getting charged for your ontribution , since i have signed off !


thanks


 

Expert:  bigduckontax replied 3 years ago.

Certainly not, just chipping in some probably useless information. I can remember the furore in the back end of the 60s.

Customer: replied 3 years ago.

thanks - not useless .


I signed articles in 65 , but of course didn't get around to studying CGT til


1968 I think .


bloody callaghan !

Expert:  bigduckontax replied 3 years ago.
I couldn't possibly comment!

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