What exactly is Aggregate Consideration in the CGT return ?

Usjes

Hi,

I'm trying to figure out what the correct value to fill in for the 'Aggregate Consideration' in the Capital Gains section of the Form 11 to account for multiple share transactions.
So generally I think of AC as being a euphemism for Proceeds when you sell shares. In my case I had a lumpsum (10k) and as interest rates are so low I reckoned it would be more profitable (and fun!) to start gambling on shares. The markets were very volatile so I picked a stock that I reckoned would roughly hold its value and was very unlikely to fall off a cliff. I would buy 10k of shares wait until they had gone up by 0.5% and then sell. I would repeat this over many tansactions, 100 times say, making like €30 each time so overall after 100 transactions I end up with 3k profit. I'm not sure what to fill in as the AC on the return now though. Intuitively I would think it is the sum of all the proceeds but this would be like 10k * 100 = €1million, when in reality I only ever had ~10k. I'm just a bit worried that if I fill in €1million as the AC the revenue are going to start investigating where I got €1million from when the reality is I never had anything like this I was just re-investing the same 10k over and over again. So does anyone know, shouild I be filling in €1million or is there some other way I should calculate the 'AC' when dealing with a chain of buying/selling shares in the same company over and over again, the proceeds from the final sale perhaps ?

Thanks,

Usjes.

Lockedout2

The answer is €1m.

If you have 100 trades it is very likely that you are trading in shares and the profit is subject to income tax and not CGT.

Usjes

Lockedout2 wrote: »

The answer is €1m.

If you have 100 trades it is very likely that you are trading in shares and the profit is subject to income tax and not CGT.

I've never heard of this before, is there a revenue document you can point me to that specifies the conditions under which the proceeds from trading shares gets classified as income rather than capital gain ? What does it depend on ? The volume of trades, the frequency, the value or something else ?
I can see the argument that any extra money you get could be classified as income and taxed accordingly but the fact is the revenue have, somewhat arbitrarily, decided that
Deposit interest should be taxed at the the DIRT rate
PAYE income at the PAYE rate
Gambling winnings at 0%
Capital gains at 33%
etc....
So now you are saying that there are some circumstances under which the CGs can magically morph back into the 'income tax' classification ? This seems very odd.
In my own case I am a PAYE worker and only got involved in shares as my previous employer used to grant them as part of an Employee share scheme, we got to buy them below market value and had to pay IT on the difference between what we paid and the market value, but we were told that if we sold them at a later date any further gain would be taxed as CGT. The example in my previous post was obviously an exaggeration to emphasize that the Aggregate Consideration could grow wildly larger than the actual amount of money being traded if many trades were made so I think it is very likely that my trades still fall into the CG classification. Still it would be good to know how exactly the change from CG to Income is defined. With the election of Emperor Trump I imagine the markets are about to get very volatile again and I was thinking it might be the ideal time to start gambling again but I'd rather pay CGT than IT on my 'winnings'.

Thanks,

Usjes.

Lockedout2

The difference between the treatment comes down to whether you are deemed to be trading in something or investing in it.

The test is known as the "badges of trade".

If someone buys a house holds it for 20 years and then sells it that's clearly CGT.

If soneone buys and sells a house every year for 20 years then they are buying and selling houses as a trade and it's Income Tax.

Ed110

Did you figure out if it was the 1M that you had to enter in the Aggregate Consideration box?

I'm trying to figure that part out too but the number I have seems crazy high when I never remotely had that amount of money. . . seems like they'd ask a lot of questions if they saw such a high number when it's such a simple answer.

travist

There’s no figuring to do really. The answer is a million.