RE: Sp19 Mar 2025 21:57
Responding to Yellowstuff at 17:33 earlier:
Taking some profits in this tax year and saving losses for the next tax year might help, but again it depends on peoplesā circumstances. Some people sometimes try to avoid tax at all costs, but often that can be cutting your nose off to spite your face. For example (my shares are in an ISA, but letās pretend they are in a taxable account):
My GGP average is, say 7p. I could sell some right now to look in some gains, make use of the Ā£3,000 allowance, and/or pay CGT at the lowest rate (currently 18%). If I donāt do this, I may have to pay 24% tax in future tax years. That seems worse because itās a higher rate, but:
Sell now ā proceeds Ā£10,000, cost Ā£5,000 = gain Ā£5,000. Say itās all taxable so Ā£5,000 x 18% = Ā£900. Cash after tax Ā£5,000 - Ā£900 = Ā£4,100
Sell next year (letās pretend the price doubles in that time ā proceeds Ā£20,000, cost still Ā£5,000 = gain Ā£15,000. Say itās all taxable at 24% so Ā£15,000 x 24% = Ā£3,600. Cash after tax Ā£15,000 - Ā£3,600 = Ā£11,400.
Iāve paid four times as much tax, and at a higher rate ā boo, but in the above situation, Iām much better off selling next year rather than now. Of course, it also depends on what subsequently happens with the proceeds, and what happens in the future (it might not doubleā¦). Itās all quite complicated, both the tax itself and how it ties into the decision-making process and real life for each person.
As is very often the case, the answer is āit dependsā! But generally speaking, yes it might help.
Sign In
Follow the stocks
