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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15916
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I purchased shares in the company that I work 2008 and sold

Resolved Question:

Hi - I purchased shares in the company that I work for in 2008 for 80K and sold for 100K back to the holding company in 2015. How do I calculate what I should pay in Capital Gains?
Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
When taking out the share sale from my tax return, I owe £51. When inserting the share transaction, I owe £7K. I thought that it would be around £3K. There is a summary of computations that has a question regarding gains qualifying for Entrepreneurs relief? I am MD of the company that I developed over this period.
Expert:  TonyTax replied 1 year ago.
Hi. Assuming the share purchase wasn't part of an Enterprise Management Scheme and that you didn't hold 5% or more of the voting shares, you won't qualify for entrepreneur's relief which would have limited the CGT rate to 10%. Take a look at HS275 for more information on ER. Your gain will be £20,000 and the first £11,000 will be tax free assuming you had no other gains in the same tax year, 2015/16. The balance of £9,000 will be charged to CGT at 18% or 28% or a combination of the two rates depending on the level of your income in the tax year of disposal. So, your liability will be somewhere between £1,620 (18%) and £2,520 (28%). I cannot see how your CGT can be as high as you appear to have got it. Have you shown the gain as a gain and not income? I hope this helps but let me know if you have any further questions.
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Customer: replied 1 year ago.
Thanks Tony - please see attached from my tax return. I did also pay a lump sum into my pension of £40K but don't think that this is confusing things as I spoke to the tax office and they told me to put £50K in the right box. If I suggest that I sold the shares for £80K, I owe £51 at the end of the return.
Customer: replied 1 year ago.
Forgot to mention that income was £97896 and paid £28,678 tax. We also took a £40K dividend.
Customer: replied 1 year ago.
Actually - I have just changed it back to selling at £100K and calculation is £2543. The higher payment looks like a payment due which includes a payment in July for the previous tax year.
Expert:  TonyTax replied 1 year ago.
The gain was £20K so that's what needs to be disclosed. The gross pension contribution is £50,000.

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