Trading the stockmarket (NO Referrals)

[mid_gen]

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I was watching the news and it did flash up that the government was being begged to NOT raise taxes. It also said that drivers may be in for a hard time RE: petrol tax. Seems sensible, it's a cash cow, it affects all a little and it encourages ppl to go electric.

Problem with petrol tax is it's yet another that disproportionately hits people that are least able to afford it. Would be fair if our public transport wasn't such a mess.

Covid has hit poorer demographics hard, and higher earners like myself have been left with more money in our pockets. It's right that taxation hits us, including CGT during a period of massive asset inflation.

 

[rickjames]

Opened up a Vanguard S&S ISA the other week and dumped £500 into LS 100; plan is to put £200 a month in there (£300 when I've built up 3 months of emergency funds) and just go on a set it and forget type situation.

Stonks and all that, right? Or am I missing something? Ah...

 

[Martynt74]

Problem with petrol tax is it's yet another that disproportionately hits people that are least able to afford it. Would be fair if our public transport wasn't such a mess.

Covid has hit poorer demographics hard, and higher earners like myself have been left with more money in our pockets. It's right that taxation hits us, including CGT during a period of massive asset inflation.

Yeah, particularly when ISA's are available at £20k/yr for people to benefit from tax free investments, along with a CGT allowance of £12.300. That's a pretty big buffer for pretty much all but the very top bracket i'd have thought.

 

[Russinating]

Opened up a Vanguard S&S ISA the other week and dumped £500 into LS 100; plan is to put £200 a month in there (£300 when I've built up 3 months of emergency funds) and just go on a set it and forget type situation.

Stonks and all that, right? Or am I missing something? Ah...

Not really, depending on your goals and timelines. Time in the market is better than timing in the market.

 

[uncle_rufus]

Question about CGT...

If I dispose of an asset on the day before the end of tax year (April 4th this year I think?) with a profit that is low enough to not go over the CGT allowance, and then on the 5th of April I immediately spend that same amount on the asset again, have I effectively "reset" the allowance owed against that asset? It seems like that's how it would work?

Follow up - if I was only disposing of part of a position to do that (maybe I pick a proportion that is just small enough to fit under the CGT threshold) and then reacquire (as above) does it make future calculations of CGT and things on the overall position really awkward/difficult?

 

[rickjames]

Not really, depending on your goals and timelines. Time in the market is better than timing in the market.

Planning on being in it for the long haul, 15-20 years. Home ownership likely, have a LISA that is also being built up every month.

 

[Surveyor]

Question about CGT...

If I dispose of an asset on the day before the end of tax year (April 4th this year I think?) with a profit that is low enough to not go over the CGT allowance, and then on the 5th of April I immediately spend that same amount on the asset again, have I effectively "reset" the allowance owed against that asset? It seems like that's how it would work?

Follow up - if I was only disposing of part of a position to do that (maybe I pick a proportion that is just small enough to fit under the CGT threshold) and then reacquire (as above) does it make future calculations of CGT and things on the overall position really awkward/difficult?

I think you have to wait 30 days before you can buy the same holding back. FYI, the tax year is 6 April to 5 April.

 

[Martynt74]

I think you have to wait 30 days before you can buy the same holding back. FYI, the tax year is 6 April to 5 April.

As above, although i "think" you can re-buy within an ISA without waiting the 30 days. It's called "Bed and ISA". Although obviously this would use up a substantial part of your ISA allowance for the year.

 

[Russinating]

Planning on being in it for the long haul, 15-20 years. Home ownership likely, have a LISA that is also being built up every month.

Yep, pretty much dump and leave, check/monitor every 3/6 months and review annually. I note down holding values and deposits every month but that's just to track growth rather than make decisions.

 

[uncle_rufus]

I think you have to wait 30 days before you can buy the same holding back. FYI, the tax year is 6 April to 5 April.

As above, although i "think" you can re-buy within an ISA without waiting the 30 days. It's called "Bed and ISA". Although obviously this would use up a substantial part of your ISA allowance for the year.

Ah I figured there would be something in there to prevent it, 30 days is a lifetime in some stocks at the moment so kind of a risky play!

 

[Martynt74]

Ah I figured there would be something in there to prevent it, 30 days is a lifetime in some stocks at the moment so kind of a risky play!

Are you married?

When you sell you can transfer shares over to your spouse to benefit from their CGT, or even put them into an ISA in their name to effectively give you a £40k/yr allowance.

Not really something i need to worry about. I'm not even using up all of my allowance



The other option (Disclaimer - i'm not sure if this would work). If you're sat on any losses. You could sell those on the last day of this tax year to crystalise the loss. Then re-buy on the 6th. You could then roll over that loss to any future years gains on other shares. The only risk is the gain on the sold share would be increased if it does increase again.

 

[ninjabib]

If they put CGT on shares upto 45% I'll be done. Not worth the risk to hand over half the profit.

I heard this rumour but I'm sure they turned round and said not an option, for the short term future at least anyway.

 

[Zeeflyboy]

I think raising taxes at this point would be ridiculous and hamstring any recovery hopes, but that said I don’t think the capital gains tax would affect the vast majority. Only people that have sums large enough each year not to shield fully in an ISA and those selling second (third/fourth/fifth!!) homes, or those being creative with their incomes from their own businesses are really going to feel any such rise.

I know there will be a few, but how many of us are putting more than 20k of fresh new money a year into shares (not counting pensions)? In normal years that aren’t COVID infested I earn a decent enough wage but I don’t come close to maxxing out my own ISA allowance let alone mine and my wife’s which would collectively give us 40k a year to invest with no fear of any capital gains taxes... with 40k going into pension there’s no danger of me having anything near that left for the ISA lol.

If you can afford to be dropping more than 20k (or 40k collectively if in a relationship) a year into them then I suggest a bit more tax on the remainder isn’t going to be ruinous.

If you are below that and aren’t investing inside of an ISA wrapper, why?

 

[Vanilla]

Problem with petrol tax is it's yet another that disproportionately hits people that are least able to afford it. Would be fair if our public transport wasn't such a mess.

Covid has hit poorer demographics hard, and higher earners like myself have been left with more money in our pockets. It's right that taxation hits us, including CGT during a period of massive asset inflation.

I think petrol tax hits home well with the current greener objectives. It also only slightly hurts. I've never noticed a tax increase on petrol and most wouldn't feel it - it's skimming a little off a huge pool compared to devastating a little pool. If people can afford to buy, tax, insure a car they can afford another £1 per tank......

perhaps we should make a new thread closer the time!

 

[Martynt74]

I think petrol tax hits home well with the current greener objectives. It also only slightly hurts. I've never noticed a tax increase on petrol and most wouldn't feel it - it's skimming a little off a huge pool compared to devastating a little pool. If people can afford to buy, tax, insure a car they can afford another £1 per tank......

perhaps we should make a new thread closer the time!

I guess that's the benefit, a few % on petrol is barely noticeable but would bring in a huge amount in revenue. The issue with CGT at that level is the majority of people who would be required to pay it are the people who can afford tax avoidance schemes to avoid it, and so the net income to the treasury would likely be quite low.

 

[Vanilla]

I guess that's the benefit, a few % on petrol is barely noticeable but would bring in a huge amount in revenue. The issue with CGT at that level is the majority of people who would be required to pay it are the people who can afford tax avoidance schemes to avoid it, and so the net income to the treasury would likely be quite low.

I don't think CGT is that exclusive, it really does hit the average investors. I have some that are doing well and i'd like to be able to benefit from it and use it to help my life in the later years. I took my money that I earned and paid tax on (45%)....and invested it in British companies and a little dabble in other stuff like crypto. Now id' have to pay 45% on that as well? 90% tax on joe schmo!

Now if it was million then people would defo consider looking elsewhere but a lot of those types of investors may already be an overseas tax resident for that exact reason.....so it's those who have roots here and a little cash who get it in the face...and CGT actually doesn't bring in that much!

 

[Basher]

I don't think CGT is that exclusive, it really does hit the average investors. I have some that are doing well and i'd like to be able to benefit from it and use it to help my life in the later years. I took my money that I earned and paid tax on (45%)....and invested it in British companies and a little dabble in other stuff like crypto. Now id' have to pay 45% on that as well? 90% tax on joe schmo!

Now if it was million then people would defo consider looking elsewhere but a lot of those types of investors may already be an overseas tax resident for that exact reason.....so it's those who have roots here and a little cash who get it in the face...and CGT actually doesn't bring in that much!

Is there a suggestion to make CGT the same as your prevailing income tax rate? That would be quite a hike. Also - surely it would only be taxable on the gains, not the base investment?

I'd personally favour an increased tax on petrol, mainly because I don't have a petrol car

 

[Surveyor]

Is there a suggestion to make CGT the same as your prevailing income tax rate? That would be quite a hike. Also - surely it would only be taxable on the gains, not the base investment?

That's how it was from 1988-2008.

 

[yogibear88]

Is there a suggestion to make CGT the same as your prevailing income tax rate? That would be quite a hike. Also - surely it would only be taxable on the gains, not the base investment?

Should only be on the gains made and it is likely you would still have an annual CGT allowance but this could also potentially be reduced.

 

[mid_gen]

I don't think CGT is that exclusive, it really does hit the average investors. I have some that are doing well and i'd like to be able to benefit from it and use it to help my life in the later years. I took my money that I earned and paid tax on (45%)....and invested it in British companies and a little dabble in other stuff like crypto. Now id' have to pay 45% on that as well? 90% tax on joe schmo!

Now if it was million then people would defo consider looking elsewhere but a lot of those types of investors may already be an overseas tax resident for that exact reason.....so it's those who have roots here and a little cash who get it in the face...and CGT actually doesn't bring in that much!

If you're maxing out your S&S ISA allowance every year as part of your retirement fund, you do not just have 'a little cash', and you will not be struggling in retirement.

Allowing those of us with money to reap the benefits of loose monetary policy to further enrich ourselves, while those on lower incomes disproportionately pick up the tab, is not a way forward that will end well...