5 Strategies to Avoid Capital Gains Tax
ฝัง
- เผยแพร่เมื่อ 6 มิ.ย. 2024
- Paying tax is a good problem to have. But not when you don't need to...
The rise of Bitcoin, Etherium, and other cryptocurrencies has undoubtedly left some investors with big gains and big tax problems. This video explains how capital gains work, how they're taxed, and 5 ways you can avoid paying tax altogether:
Use your capital gains tax allowance each year
Bed & ISA
Buy a Proxy
Get Married (transfer assets to your partner)
Pair off losses
I am not an accountant, so please do not think of this as tax advice in any way; if you do think you have a tax problem, please go and see a specialist.
🎯 Work with me 🎯
I am a Chartered Wealth Manager providing financial planning services in the UK. If you would like to find out more about working with me, please follow this link: www.videoask.com/fd7wzrtvz (LIMITED AVAILABILITY)
00:00 Intro
03:23 Capital Gains Tax Explained
09:37 Strategies to Avoid CGT
Hey guys, this one is quite infographic-heavy. I think it really helps to visualize these concepts, and I quite enjoy making them. But I'm keen to hear what you think of the style?
Thought they were great, anything tax related I find it’s easier to digest as a visual
@@ThatFinanceShow Thanks Tom, I agree!
Love the use of infographics - I also rely on visuals in my videos to make the content easier to digest! Great video overall - keep it up, James!
Hey James, can I ask, what do you use to create these infographics? Thanks
100% agree that the graphics are very helpful indeed. One of the reasons I like your approach (along with the very relevant content)
The Tax free allowance is now £6000 in 2023, and £3000 from April 2024.
Shocking that it has been reduced by this much. Doesn’t hurt the mega rich but hits the average investor hard.
@@adpriceless9106exactly they are going for people who just want a small investment gain but they're too afraid of going after big corporations that register in other countries to avoid paying tax
I lost hope when I heard that they're going after eBay and vinted as well. When is it enough
😮
@@adpriceless9106whenever the left wants to “tax the rice”, who they hurt are always the middle class and those who are trying their best to get out of poverty with their hands
Soon be £10...
Best video on finance I've seen on TH-cam, really useful stuff, thanks man!
I’ve had to watch this 3 times and still will need to re watch again another 3 times.
Really loving your content. Turned 29 at the end of last year and have not been smart enough to save money or have the knowledge to do so. Instead fell into the trap of getting into debt.
This year I’m taking over my finances. Clearing the interest free debt I have then looking to invest. Toiled with the idea of investing small amounts now and pay the debt over as its interest free (till the end of 2023) but can’t decide if that’s the best option or not.
Keep posting! Great channel
but im just a 20 year old thats watched a few finance videos
This is great thanks! I like the Bed & ISA strategy. WIll be saving this for future.
Hey Charlie, I'm glad you found it useful!
Thank you for the content James! Best financial UK you tuber I’ve seen 👍
Thanks Catherine!
I didn't know many of these things! I'm saving this video in my archive of financial advices. Thanks James!
You’re welcome!
So clear! Thanks!
Great video learned a lot thanks ❤
Really like to format and the way you explain, easily one of the best I have come across so far. Keep up the great work, thanks for taking the time to do these videos.
Totally agreed, I'm really enjoying these videos as a new investor.
Cheers Manas, thanks for the support!
Thanks Kris, I will certainly keep at it!
Honestly man, for what the subject is, with support of visuals you have explained it very well. Also the way you speak, it's so clear, pure mastery of communication. I could play this video on x1.5 speed and still catch every bit, despite english being my second language.
Haha thanks mate! Thanks for the support!
wow, brilliant video .. love the content ..learning so much 10/10
Thanks for the video James. Your advice is invaluable. Something that I have realised is that you can’t use your CGT and personal allowance together. Some people may assume(wish) that you can so maybe this can be clarified in a next video video.
Hi James. Another brilliant video!! Just on time for me :) Thank you.
That's good to hear!
Remember, you should not go messing up your investment portfolio just to save a bit of tax. Staying invested in the right things with the right level of risk is far more important, which is why these strategies are so handy, as they allow you to save tax whilst remaining invested.
hi great video, would you know if i were to withdraw profit into a Portuguese bank account then move to Portugal for most of the tax year from the uk with investment visa. would taking the profit in the uk be taxable? many thanks.
Great content, thanks James. Question: I have the same fund in an ISA and a GIA, which I need to sell some of to fund a property deposit. I'm thinking I'll sell from the GIA up to the CGT-free limit and sell the rest from the ISA, but would there ever be an advantage to selling more from the GIA and paying some CGT now to keep more invested within the ISA? I'd also love to see a video on drawdown strategies in general - there's lots out there on £cost av vs lump sum on the way in, but less on equivalent approaches to selling. Thanks!
Hey James great vid. So true not to let the tax tail wag the dog, some people get so wound up about tax they make crazy decisions.
Cheers Tom! Yes, our aversion to tax makes us do mad things!
Dude you are awesome, thank you for your insights! Nice kitchen too.
Cheers mate!
Thanks for the insight James 👍
You're welcome!
Finally someone managed to explain tax!
This was soooo timely! Im currently reading through a new Employee Share Scheme contract that is suppose to be more ‘tax efficient’ than how my original share options are currently held, so this was REALLY useful in helping me understand the capital gains part of the contract. Still on the fence about signing onto the new scheme though and I have until tomorrow to decide - finance jargon is killing me lol ! But I’m understanding more and more thanks to your videos. :)
Options contracts can be so confusing! Why wouldn’t you sign on ? What’s the draw back? Or are these shares you pay for out of your salary?
@@JamesShack no I don’t pay for it with my salary, the drawbacks are the exercise price is higher than the old scheme (previously paid nothing). I’ll be putting a really big egg in one basket haha. However, to offset the cost to exercise, more share options have been granted at a higher value (unclear how this benefits me if I still need to pay to exercise the extra options lol). The options need to be held for 3 years to benefit from not having to pay income and NI tax. So if I exercise and sell earlier I’ll have to pay the tax anyway. THEN if we merge, the worst case scenario is pretty bad (well how I’ve interpreted it) lol.
@@nkiruanyika it’s still good to be offered them at all tho!
Short, simple and to the point. Good video James. Would add tax loss harvesting to that list as an active way to realise losses and reduce taxable gains. Also don't forget tax allowance that you can roll over
Thanks Mohamed. Which tax allowance roll over are you referring to?
What I’m wondering. Made money at crypto, but I lost in the stock market.
Can I tax loss harvest my stock losses against my crypto gains?
Really cool video, have wondered how it works but put off reading about it because I don't use up my isa limit. Great evening entertainment, not sure what that says about my evenings...
Haha I'm the same don't worry!
Great video as always. Just need to make some gains now :)
Damn right!
I need to watch this again a bit much around my head right now😃😃
What a great, informative video. Happily subscribed.
Something that I'm struggling with is how to find a good financial advisor or accountant, and at what stage you should consider this option. To be honest I'm not even sure what the difference is! Would love to see a video on that topic.
You only really need an accountant if you're running your own business or have very complicated tax matters. Financial advisers are for those closer to retirement who again have more complicated affairs. You'd be best trying to learn what you can whilst you're young so you can do it yourself when you're older!
Great video again!
Cheers Richie, glad you liked it!
Do you have any tips/strategies that can be used to reduce a CGT bill on a buy to let property?
This is so useful information!
Glad it helped!
Brilliant !
Cheers Steve, thanks for watching!
Amazing video
Can you do a pensions video and how to save on tax that way?
Hi James. Great video.
When buying a proxy to release gains, are there any rules on how long you need to hold the new asset before selling so it's free of cgt?
Thanks!
30 days, then you can switch back to the original.
Just to clarify, this does not make either trade CGT free. It just means that the gain is realised, and, if you’ve done it correctly, the gain should fall with your CGT allowance, where there is no tax to pay .
Amazing video! I found this very helpful, especially because online there is so much information but you've been direct and clear. I have two questions for you!
-- Let's say that I invested £1K and I got £5K gains after a year. Do I still need to do the tax return even if I don't sell?
-- If I exchange crypto like BTC to ETH, does it coin as a sell operation?
-- If I earn tokens by staking and I'm still below £12.300, do I need to. do the tax return?
Thank you so much, and I'm looking for to see more videos and learn more from you!
Just a comment regarding what you said at the end there - CGT probably won't affect people buying and selling stocks (you need to invest £1666 per month to reach your ISA allowance) since they won't gain that much at a time, but it does have an effect if you're selling a house since gains would probably exceed the allowance, and can't be held in an ISA-like account.
Yes, gains from selling property are the most common. Unfortunately there’s not much you can do about those tho!
Hi
Does the income from regular job and capital gains are counted like one income or we pay taxes separate from each other?
I like your content!!
Capital gains and income are taxed separately
Hi James
Big fan of your videos. How does the capital gains allowance interact with returns you get from a S&S ISA?
It doesn't. Any gains within your ISA do not count towards CGT. ISAs are tax free.
Hi James. Really helpful video. Regarding your Proxy tip and specifically the S&P 500 suggestion. To keep funds within a Vanguard account could I sell down VUSA for VUAG or are these funds too similar? According to the HMRC for the share to be the same it states "same class, same capacity, later acquisition within 30 days". Are VUSA and VUAG different capacity ETFs or are they the same and thus won't facilitate the proxy bed & breakfasting tip you suggest here?
That's a better explanation than the government pages :D
I am going to do the Bed and ISA, so my current gained (only six months) is 15.40%, so sell £20k would mean, the gain is £3080.00, which sounds simple enough. So I am going to keep putting money into by GIA and in new year transfer to ISA. BTW Another great video. I have been learning about CTG today and found yours just explained it so well.
Great stuff James, I'm glad it's helped!
Great vid James, question..if I made a loss over 30 years ago, can I still offset that against any gains that I could make when investing in shares or is that loss only used for that tax year 30 years ago?
If you reported it to HMRC then yes.
Great video James. You made a very boring topic very interesting and understandable. So just to clarify, if you invest through ISAs then you don’t have to pay CGT when you sell? Even if it’s a gain over £12,300? Also, does the selling off your stock each year to reduce yearly gain apply to ISAs?
I had never heard of there being a good scenario to sell off assets at a loss (to offset CGT as you say like on a house). Sounds like I might need an accountant in the future! I’ve learnt a lot through your channel, so thank you!
You don't need to worry about CGT if it's all within an ISA, either for dividends or selling assets.
Hi James, if I sold my assets and materialised the gains, can I claim cash gift to my spouse same way you presented, or does it sit under £3k limit? Or do I pay tax on all gains first and the cash gifting is treated separately? Thanks for the great video
Hi mate, I play axie infinity which is a play to earn game. A player can have multiple accounts but can only play 1. The other accounts can be lent to other people ie scholars. The owner then sends them their crypto share earning each month. Do you think that the payment to your scholars count as capital gains tax? I know that there is a 12K allowance per individual and I just wouldn't want to use my allowance for this this as the assets won't be going towards my name anyway. I'm also based in the UK so any suggestion would be much appreciated. Keep the great video contents going..
Dear James, I absolutely love your video and how clear it was. Since you offer to answer all comment (a rare quality indeed) I want you to help me with farming and pooling on crypto. If i stake 100 of something with an APY of xx% which is autocompound every 8 hours, does that mean I have a taxeable event to register? It would be quite mad as you would end up with 1000s of lines per year. Do I have to worry abt this? Or is the taxeable event only occurs when I take profit from the pool and cash out my crypto? Many thanks for your help on this
Hi Antoine, this is a question for an accountant i'm afraid. I would imagine you would pay income tax on that rather than capital gains.
The phrase "Bed and ISA" comes from the process known as "Bed and Breakfast" where, pre `98, you'd sell shares late one day then buy back at breakfast, maybe over April 5/6 after calulating your remaining CGT allowance.
Great video! The $12,000 tax free allowance on capital gains. Is that in the USA. You are speaking in pounds not USD ?
Hey, great video and I’m now a subscriber. Question: how is the capital gains tax worked out on the gift to your wife? So if I transfer some crypto for example to her account from mine, can she make £12,300 more on the value of the crypto from the point I transferred. Hope that makes sense :/
If you have shares in an employee share purchase plan (ESPP) and then sell them with a gain, does that gain still attract CGT ? Thanks
Great Work - but for Clarity (if I understand correctly) using BED and ISA is still a taxable event even though you said (12:50) “you flush out your gains” that sounded like it was a way of avoiding CGT. Please can you clarify, thanks.
Flush out your gains is another way of saying you're resetting the book cost. So yes it's taxable and can help you make use of your personal CGT allowances each year rather than letting the gain build up year after year.
If I use cryptocurrency as collateral to borrow cryptocurrency from a platform, e.g. Blockfi or Youhodler, that is converted to cash am I right in thinking that there’s no CGT or any tax on that cash as long as I repay the loan (with cryptocurrency or cash)? I'm guessing this would be like remortgaging and borrowing money out of a house to fund something, and the loan is non-taxable.
how do we go on now the cgt free allowance is going to drop to 3k. is there anything we can do ?
Quick question, as a non-resident for tax reasons (I currently live in China) am I liable for CGT? Am I still allowed to invest in an ISA?
Brilliant. Content as usual so thank you for that .... I have a question ... if I sell some of my shares on trading 212.. that then sits in the deposit part of the site ... if I reinvest at that point into other shares rather than send those gains to my main bank account is that still classed as a gain ... so example ... I have 100 shares in Nio ... sell £2000 worth that money is now sitting on the trading 212 deposit part of the platform ... I then use that £2000 to buy Tesla ..... would that be classed as a gain even thou it has not gone into my bank account ...... thank. You
Hi Will, I'm glad you liked it. If it was in a Trading 212 Invest account then yes, that would count as a gain. It's booked when you sell the asset, as opposed to when you removed the funds from the platform.
Appreciate the response James thank you buddy
What about LTIPs? I pay income tax each year on the amount that vests, do I then pay CGT when I sell if the gain is over the threshold? and following is the gain calculated from the original share price of the share price from when it has vested?
Great videos James. Perhaps a video on LTIPs might be a good topic… such as how good are the as investment vehicles compared to transferring them into ISAs or pensions and the tax implications.
Yes you pay CGT on any gains over your allowance.
From the original share price.
Hey James, thanks so much for all the informative videos you make, which have helped me a lot over the last few months! I'm about to file Capital Gains figures (losses & gains) from cryptocurrencies over the last 6 years but need some help with trying to use my wife’s capital gains tax-free allowance. My (crypto-averse) accountants are telling me that as my Crypto Exchange accounts are in my name only, then the reporting should be against my name only and can therefore not utilise my wife's unused annual allowances. Do you know if this is completely correct? After all, these Exchanges do not make provision for Joint accounts and can only be held in a single name. Would Gifting crypto be of any benefit in helping offset gains from these previous years and if so, how does this work in practice?
The BED & ISA was a bit of an eye-opener. Thanks for this.
One question, you talk about the CGT being on top of your current earning, but if you are retired (which I am hoping to do soon), can you offset your regular tax allowance in addition to the CGT so they become £24K+ instead of £12K CGT with the other £12K unused? That would give a married couple almost £48K+ instead of only £24K (in addition to ISAs). I bet they don't let you do this do they?
That’s only for working out whst % tax to pay. If you had £24k of gains with no income you’d pay 10% tax on the amount over your allowance.
@@JamesShack Thanks. That's what I thought (sadly). So if I have all my money in funds, I'm always going to be paying based on CGT and not personal allowance. Is that correct? While I can increase the ISA investment each year to minimise tax going forward, are there any mechanisms to utilise both personal and CGT allowances once you stop working?
do you have a link to your website?
Another great video. Can you do a video explaining Crypto currency? I hear so much about it in the media, Elon Musk accepting it’s a real currency to buy a Tesla etc. several different types of this crypto currency. Is it hype, how do you know it’s value, what are the potential gains and loses?
If I only get £500 of capital gains in one tax year total. I wouldn’t be subject to any CGT. Would I still need to declare it and fill in a self assessment form or can I do nothing as there is nothing to declare?
Hello Jim,
does the 30 day rule apply to crypto or just stocks?
thanks
pp
It applies to both.
Great Video James, I have questions related to BED and ISA and sell and rebuy in 30 days. I have some things in AJ Bell that I will bed and ISA next tax year. But their fees are high so I have started using free trade and buying each week. But I would prefer to use AJBell for the ISA as they are not the same platform if I sell on freetrade get the cash into my account and re-buy in AJBell either inside an ISA or GA am I would that be covered for in the 30 day rule (It would have to be the same stock and amount as close as possible as there will be fees and change of price over say a day it tasks to do that)????
It can be across platforms. But yes you’ll need to withdraw the cash from the GIA to contribute to the ISA on freetrade
@@JamesShack Thanks you are the most generous TH-camr I have ever known with your time. How close to the same stock and units would it need to be
Hy james what is the background music? i like it
It's all from Epidemic sound. I pay like £9.99 a month and get to use their music without copyright strikes.
Great video! You explained a few things in one vid!
Firstly capital gains tax in the UK ✅
Then ways around that are really sensible ✅
P.s when you mentioned the first strategy being bed & ISA, you actually used a "2" in your graphic.
Great video, thanks so much. If I had a gain of 20k from shares (not in my ISA account), am I able to sell the shares and transfer the money to my wife to utilise her CGT allowance? Everywhere I read it says I will need to transfer my shares to my spouse but how do I do that if my wife does not have a brokerage account?
You need to transfer them before you sell. She’ll need the open one, ideally with the sane broker you use and then ask the broker and they will do it quite quickly. Should take a day or so.
@@JamesShack Thanks for the reply James. What about when I am day trading stocks? I'm not holding the stocks long term, at the end of each day I am only left with cash profit. If I have gone over my CGT profit allowance how am I able to utilize my wife's CGT allowance in this scenario?
Thanks for all the great content.
I have a big losses on trading gas can I sit it an against my tax ????
Question: If I buy 1k worth of Btc, then sell it into Xrp, then sell it into usdt , etc... However, I make zero gains on the swapping/selling. Doing this 50 times during the tax year, do I pass the yearly 50k proceeds to submit a tax return with my 1k?
Super usefull. I was thinking to do the shift from my company stock purchase scheme to ISA but wasnt sure but now it makes perfect sense to sell those and switch them to ISA every year so no tax will be paid. Thanks a lot.
If you could pick just one fund to invest into for returement, what would it be?
Well for me personally it would be an all cap global equity fund. But I’m a high risk investor so it may not be suitable for others!
Would selling the accumulation units of a Fund and then buying back the income units of the same fund count as a sufficiently different investment to avoid the 30 day rule? I'm guessing not but was just curious.
No, that does not count.
A quick question, may not be very related to the topic you covered though. Noted that you were investing weekly in the fund you showed. Hence, invest monthly or weekly? Thank you for the content, easy to digest :) Keep up 👆
That was only because the market had crashed last year, and i was trying to invest as much as I could. Typically I just invest monthly straight after i get paid.
Hope that marriage is worth it, they're VERY costly in the end 😅.
Now, what we all need is advice on wrapping BTC in an ISA...annoyingly you cant even buy ETF BTC products since the FSA banned them.
Would be interesting to here your views on BlackRock and the first spot tracked BTC ETF and any predictions to when H&L et al will allow them.
Dear James, is day crypo trading (thousands of transactions a year) subject to income tax or capital gain tax in the UK?
That’s a question for an accountant. Typically trading crypto is chargeable to CGT but if your trading the same coin over and over within a 30 day period it has slight different rules as explained in this video. However, if trading is your profession it could be deemed as being taxable as income. Again best to speak to an accountant.
Good video. What about if a man and wife have investments together on a platform but the account is in the husband’s name, can the CG tax allowance be withdrawn for both of them to one named bank account? After all, the money invested was earned together. Hope this makes sense.
If the account is in your name then you will be the legal owner of the assets, and any resulting gains are yours. It's the sale of the asset that triggers a gain, irrespective of whether you withdraw the proceeds to your bank or reinvest them in something else. To use both of your CGT allowances your wife would need to set up her own account and you would need to ask your broker to transfer some of the assets to her, before she sell them. Check first with your broker that they facilitate this. Does that make sense?
thanks James, that was a key question I had (you confirmed what I had understood and expected) so it's vital to have the broker conversation to see if they can facilitate the opening of a 2nd account in her name. in my case that's a US broker (Schwab).
Hi James another great video thanks. My spouse and I wish to sell an investment property which we are 50/50 in. Can we both use the CGT allowance which would total £24,600? Or would it be better to transfer the asset to my wife’s name as she is drawing a state pension but I am high salaried (over 50kpa)? The gain would be between £60-70k. Many thanks
The gain would be split across the two of you. Moving the property entirely into her name may be difficult, especially if you have a mortgage on it. If you work with an accountant they should be able to help you reduce that gain by thinking about any money you have spent on it could be seen as a capital outlay/improvement. An accountant can often return several times there fees in saved tax.
@@JamesShack many thanks James.
I’m a big fan!
11:13 When you mean "buying it back" within 30 days, do you just mean placing a new order to buy the same shares? or do you literally mean somehow requesting for the sold shares back?
The former.
A big thumbs up for a great video explaining CGT to greenhorns such as myself. Cheers! +1 like sub and bell thank you
Thank you James. I was wondering how CGT works if I take a leveraged position? Say I take out a 12 month personal loan of 25k at 5% and make a gain of 15.3k, do I pay CGT on the 3k over the allowance or can I use the £1250 interest payments to offset the gain and pay CGT on £1750?
Numbers are simplified for the example and I'm not suggesting that anybody should do it as it's incredibly risky, but it's an interesting thought... :)
Hi Dale, interesting one. I'm not an accountant so cant say definitively , but i think you would have to prove that the loan was specifically taken out for the purpose of investing for it to be deductible from the gain.
@@JamesShack Thank you. I shall make some further enquiries. I'm not saying that I'll do it but it's nice to know what the options are.
@@dale-palmer (don’t do it!)
Hi there! Newbie here! If one's CG from crypto sale is well under the CGT allowance then is it still mandatory to report that to HMRC? thanks!
Nope
@@JamesShack 🙂
How would it work if you sold bitcoin and bought other cryptocurrency, for example ethereum or cardano? Does this realise the gains or it doesn’t work because they’re also other similar cryptocurrency?
That would work yes, so long as it’s a different asset.
The Bed and ISA name comes from the the previous way of realising gains to avoid CGT, called Bed and Breakfast. Sell shares end of the day (bed) and buy back at beginning of next day (breakfast), lock your gain in and not be out of market overly long.
Hi James, Thanks for your video.
Could you please help with the following, if I sell (stock A) from within a GIA and move the proceeds to my Stocks and Shares ISA account and buy the same (stock A) back, would this still lock in my losses so I can use for future tax loss harvesting. Also, would I then be able buy the same (stock A) within the original general GIA or need to wait 30 days? NFA
A) Yes. B) No. You need to wait 30 days.
@@JamesShack thanks James 😀
Hi, great video! I have a question - why are HMRC contacting people that have £5000 or more in capital gains on crypto when the amount you can have Tax free is just over £12,000?
I’m not aware of this!
@@JamesShack I spoke to HMRC and it’s because they want to know who has accounts
Love your videos.
How about some tax and pension videos for single people without children?
Getting married as a 'tax saving syrategy ' seems a bit drastic for me.😊❤😉
Hi James, 1) how does it work the tax wise, if I pull my money but now instead of gains I pull it with a loss? How does the hm revenue sees this?
2) this £12k allowance has nothing to do with your £20k allowance for the stocks &shares ISA, does it? Thanks 😊
You then have a loss that you can carry forward to future tax years. So if you had a £20k gain this year. But had a £10k losss last year, you would have no tax to pay this year. No this is separate from ISA allowances
@@JamesShack many thanks. keep up with that amazing content.
Janes, these ETF's once set up for 20yrs or more, how do you avoid a large bill at the end of the term?
Hi Drewm you would sell down parts of it each year to release gains up to your CGT tax free allowance. So you pay not tax, and then reinvest the proceeds after using a proxy for 30 days. I hope you understood this from the video. If not, watch it again!
@@JamesShack thanks James, I think I understand.
Hi James, total newbie here. Recently started and opened an ISA with vanguard with a Lifestrategy Fund. everybody is talking about maxing out their ISA - I dont think Im financially in a position to put away that max amount per year - is there anything that we should still do with our ISAs before April?
Hi Cathy, most people won't be in a position to max out their ISA every year. I know i'm certainly not! There's always lots of "Use it of lose it" advertising at this time of year but don't let it scare you in anyway. Just stick to your plan and invest whatever you can afford to. And thanks for your continued support and comments!
@@JamesShack thanks so much for your reply, really appreciate your content for making finance approachable. keep up the good work mate!
@@cathy2708 thank you I will do!
I’ve invested money in a mining pool it’s made substantial gains but trying to get it out to my wallet is not simple, I’m being asked to pay 20% upfront for tax. Am I being scammed?
Perhaps, that’s the Wild West
My wife wants to sell an investment property, with a large gain (>£80k). As we will not be realising any other gains this year, and I plan to have very little other income, how difficult is it for her to gift half of it to me prior to sale in order to minimise CGT? It currently has a mortgage on it.
First stop is to speak with the mortgage provider and see if they will allow it. If so run it past an accountant to check the full CGT position and ensure it will be ok.
Hi great video. I have some crypto that is jointly owned by me & my wife although the exchange accounts are in my name. Through trading tokens I have triggerred quite a bit of cgt. As the fund is jointly owned, can I divide by 2 and put each half on our respective tax returns? thx in advance
Ask an accountant, then ask god … no one knows who own crypto!
@@JamesShack I will although I wonder how many fully understand crypto yet
If we sell assets but stay below the CGT allowance, do we still need to complete a tax return for the year?
Not normally. But there are a few occasions as detailed here: www.gov.uk/capital-gains-tax/work-out-need-to-pay
Thanks Daniel - my question too but you got there before me :)
Here is a question for anyone who can answer. If I sell my shares and use the money to buy, say a yacht in a foreign country and keep it there or sail it away to a third country. Do I owe tax on the money and who should be due the tax?
That depends on what country you live in. But you will normally owe capital gains tax in whichever country you're resident in when you sell.
So if I make 26k yearly in job and make another 20k from crypto, am I falling to higher tax band category which is above 37700 of annual income meaning I have to pay 40% income tax + 10% capital gains tax Or annual income is calculated solely on job income? Hope u understood this question 😀
HRT is at £50k of income, and if you went over that with gains you would only have to pay the higher rate on the gains, so 20%. But only on the portion of gains that pushed you into the higher tax bracket.
What are your thoughts on just not filing any taxes until the HMRC presents you with a bill? Why I should do their job for them and figure out how much tax I owe over all my crypto trades? Is it illlegal to not go out of your way to be cooperative, as long as you have the funds to cover the taxes should they ask? I also heard horror stories about the IRS in America treating you worse and worse the more cooperative you are. Apparently if you file a tax report once they hound and harrass you from there regularly with audits. Do you know if it's similar in the UK? God I hate that capital gains tax exists.
Well James, it could have been a lot worse, I was expecting them to put up CGT to the same level as income tax. But so far they have refrained. It can be a bloody nightmare working out how much tax you have to pay. And it does seem strange that the onus falls on us to work out how much tax we owe, especially when you have to pay an accountant to do it.
But i also know that if the govt could find an easier way to do it, and keep track of everything themselves, they would. Because it would mean a much higher tax take.
However, this is the system we have, and it's largely a trust-based system. I trust you to pay your share just as you trust me to pay mine. If that trust is broken, then the whole country goes down the pan.
HMRC is generally very good if you co-operate and volunteer information or mistakes. If they catch you however...
I also find it madenning that most investment platforms don't do this stuff for you.
I have not used this so i cannot vouch for it. But you could use something like this to help work out your crypto tax.
www.accointing.com/
@@JamesShack Cheers!
Pre-empting some of your questions:
*When do I have to pay tax by and how?*
The tax year will end on April 5th 2021, but you don't actually have to pay tax on gains made in the 2020-2021 tax year until January 2022. You do this via a self-assessment tax return which you can register for online. You can pay the tax via debit card through the site.
www.gov.uk/register-for-self-assessment
*I trade a lot; how do I work out what I owe?*
You should be able to eyeball if you're going to be at, or over, the £12,300 allowance. If you are over, you can either try to use an accountant to work out your gains or software. There are various software products where you can upload your trade history or contract notes, and it will work out the tax for you.
Even though you don't owe tax, you may still need to report them via a tax return. www.gov.uk/capital-gains-tax/work-out-need-to-pay
*Should I report losses?*
YES! Just as you can match off losses within the same tax year you can actually carry forward losses from prior tax years to pair them off against gains in the present tax year. However, YOU NEED TO HAVE PREVIOUSLY REPORTED THE LOSS TO HMRC. www.gov.uk/capital-gains-tax/losses
*Can I invest the money I've put aside to pay tax next year?*
This is a bad idea unless you know that you can pay the tax with money you'll make later in the year. Even so, it's still risky.
Top video to guy making finance for simpletons like me
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My 15yr old reckons you are using a green screen? I’m just glad he is paying attention. 😂😂
Haha that’s just my kitchen!
@@JamesShack egg on Kades face. 😂😂 love your videos, they are very easy to understand & watch! 👍
My head is spinning!
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Do you invest in crypto?