Important information - the value of investments and the income from them, can go down as well as up, so you may get back less than you invest.
Q: “When selling shares outside of an ISA how can you know much capital gains you will make so you can stay below the limit?”
When you sell investments outside of an ISA or SIPP, in other words from an Investment Account, any gains (which is the difference between the purchase price of an investment - or book cost - and the sale price) above your annual allowance are subject to capital gains tax (CGT).
At the moment the CGT allowance is £6,000 for the 2023/2024 tax year. As of 6 April 2024, it will halve to just £3,000.
If your total gains in the tax year are above your allowance, then you will pay CGT on the excess either at 10% (basic rate tax payer) or 20% (higher or additional rate tax payer). You can offset gains with any realised losses in the current tax year and carry forward unused losses from previous years providing they are reported to HMRC within four years from the end of the tax year in which the asset was disposed of.
Explainer: Learn more about Capital Gains Tax
It’s a complicated area and we’re not tax specialists, if you’re at all unsure speak to an accountant. HMRC also has a number of useful CGT tools and calculators.
How to find your capital gains
You can find out more about your Capital Gains Tax information through the online Capital Gains Reporting Tool. To do this, you will need to log in to your online account or go back to your account summary. From here, select 'Transactions and Reports' from the top of the page and then 'Capital gains reports'.
You can use this page to generate reports of your realised and unrealised capital gains with Fidelity. These reports should not be solely relied on when completing your tax return but instead should be used as a prompt to help decide if a more detailed look at your capital gains is required.
Please note, if you only hold an ISA and/or SIPP account with us there won’t be any CGT information.
Not used all your 2023/4 ISA allowance - think about Bed and ISA?
If you’ve not used all your annual ISA allowance and hold money in an Investment Account, it’s possible to move money from your Investment Account to your ISA. It’s worth noting you’ll be out of the market while the money is being moved and it counts as a taxable event for Capital Gains Tax (CGT) purposes. The Bed & ISA process takes up to six working days to complete at Fidelity - meaning your money could be out of the market for up to four days. To make sure we can process your request in time, I’d recommend you get your completed instructions in to us by 25 March. Better to be safe than sorry. Learn how to complete a Bed & ISA online.
About Fahima Hussain - Wealth Adviser
Fahima’s worked in the banking industry and financial services for more than 23 years. She helps customers in many aspects of financial planning, advising them to help build better financial stability. As a Wealth Adviser, she enjoys working with customers to help them achieve their financial goals and aspirations, by understanding where they are now and where they want to be. You can learn more about our financial advice service here.
Got a burning question you want to ask? Why not drop us a line. Click here to ask an expert your question.
Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Tax treatment depends on individual circumstances and all tax rules may change in the future. Withdrawals from a pension product will not be possible until you reach age 55 (57 from 2028). This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.
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