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Tax implications of shares

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  • 06-01-2006 4:31pm
    #1
    Jack_Flash
    Closed Accounts Posts: 39 ✭


    Can somebody explain to me what are the tax implications involved with buying and selling shares? I know that capital gains has to be paid but do I have to pay income tax also? Any help with this would be cool.


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  • Options
    #2
    Jack_Flash
    Closed Accounts Posts: 39 ✭Jack_Flash


    Can I have this thread moved to the investment section?


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    #3
    ionapaul
    Registered Users Posts: 5,297 ✭✭✭ionapaul


    No income tax, just capital gains tax once your gain passes your annual limit (exemption), which is something like €1,700 IIRC. Plus you offset your costs against the amount you owe, not exactly sure how. CGT is 20%. So if you bought shares worth €10k on 1st January 2005 and sold them for €20k on 1st January 2006, you would owe €10k-€1.7k = €8.3k/5 (20%) = €1,660 (ignoring costs).

    Someone will definitely correct me if I'm wrong! Have a big tax liability to pay this year though...:)


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    #4
    Kinetic^
    Closed Accounts Posts: 13,249 ✭✭✭✭Kinetic^


    Annual exempltion limit is €1,270. Not much tbh.

    If you sell them within the same year there are a few conditions.

    There is also an indexation table for costs, which began on the 6th April 1974.
    So if you spent £1 back in 1990, it'll be indexed at X because comparing a £1 from 1990 with a £1 in 2000 just wouldn't make sense.

    Most of the time its like Ionapaul said but just be aware that there are some other rules that need to be taken into consideration.


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    #5
    Jack_Flash
    Closed Accounts Posts: 39 ✭Jack_Flash


    Cheers guys. I take it also that it is an individuals own responsibility to pay his or her own tax on gains from shares?


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    #6
    Kinetic^
    Closed Accounts Posts: 13,249 ✭✭✭✭Kinetic^


    Jack_Flash wrote:
    Cheers guys. I take it also that it is an individuals own responsibility to pay his or her own tax on gains from shares?

    Correct.


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    #7
    Zascar
    Moderators, Motoring & Transport Moderators, Music Moderators Posts: 12,778 Mod ✭✭✭✭Zascar


    Can anyone tell me what the reples are if you by them in an Employee Share Purchase Plan. 10% of my gross wages goes to buy my companies shares every month. I was told you only pay tax on the profits, is this true? What if when you sell them they are cheaper than the price you originally paid for them, are you still taked on them?


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    #8
    ronbyrne2005
    Closed Accounts Posts: 3,494 ✭✭✭ronbyrne2005


    you then have a taxable loss and can use this to reduce your capital gains liability on other asset sales in same or following years.


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    #9
    KevIRL
    Registered Users Posts: 39,546 ✭✭✭✭KevIRL


    Hi guys

    Does the exemption apply to stock options recieved from an employer or is this viewed as regular benefit in kind?


  • Options
    #10
    ronbyrne2005
    Closed Accounts Posts: 3,494 ✭✭✭ronbyrne2005


    share options arent liable to capital gains tax, when you sell the shares after exercising the options and theres a gain ,then you pay cgt.as for benefit in kind its too complicated to deal with here but if the share option scheme is revenue approved you can avoid BIK in certain circumstances such as if you hold the shares for longer than 3 years. theres no benefit anyway untill you exercise the share option,ask your employer and look at the revenues website for your particular circumstances.


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