Paying capital gains tax issue

Coinsguy

Hey,

So last week I withdrew some of my profit (under 1270 euro so it's tax free). I only realised that you need to declare this even though there's essentially no tax on it to be paid - on this page (https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/how-do-you-pay-and-file-cgt.aspx) under the "How do you file your CGT return?" heading it says:

Form CG1 – if you do not usually submit annual tax returns
Form 12 – if you are a PAYE worker

Few questions:

1) I'm a paye worker and usually don't submit annual tax returns (although in the future i guess i will be?) so should i do both or just the form 12?

2) I withdrew a small amount last year that I didn't declare, how do I declare this now, I know I'll be hit with a small fine but still might as well get it dealt with.

3) Any general tips? Want to get this done and dusted asap and hopefully all done online.

thanks

Geuze

Coinsguy wrote: »

Hey,

Form CG1 – if you do not usually submit annual tax returns
Form 12 – if you are a PAYE worker

Few questions:

1) I'm a paye worker and usually don't submit annual tax returns (although in the future i guess i will be?) so should i do both or just the form 12?


thanks

Form 12 is the tax return.

kokiyou

Are you sure you need to file it? It says you must file it even if zero CGT is owed, only if you are using losses or relief, I don't think this includes the 1270 exemption? I could be wrong though..

"You must do this even if no tax is due because of reliefs or losses."

Coinsguy

I'm competelty lost.

I withdrew about €1,000 so it's under the limit. I just printed out the form 12 there but now I've some issues:

1) It says "capital gains tax for the year 1 january 2016 - 31 december 2016" etc - shouldn't this be 2017???

2) No idea how much info I need to fill out. Section 78 makes sense since it's about CGT but what else is needed? Is it just that and the personal details section? Is it just the CGT section and personal details? Someone mentioned they'll need your p60 too but surely not?

Surely there's a guide somewhere, half tempted to pay someone to do this for me but i'm not even over the limt for tax

KellyXX

Coinsguy wrote: »

I'm competelty lost.

I withdrew about €1,000 so it's under the limit. I just printed out the form 12 there but now I've some issues:

1) It says "capital gains tax for the year 1 january 2016 - 31 december 2016" etc - shouldn't this be 2017???

2) No idea how much info I need to fill out. Section 78 makes sense since it's about CGT but what else is needed? Is it just that and the personal details section? Is it just the CGT section and personal details? Someone mentioned they'll need your p60 too but surely not?

Surely there's a guide somewhere, half tempted to pay someone to do this for me but i'm not even over the limt for tax

You don't need to pay it til October.

Coinsguy

KellyXX wrote: »

You don't need to pay it til October.

Next October?

So if you made profit in March 2017 for example. You don't fill in the form 12 until 2019? I did make a tiny profit in 2016 so wouldn't mind filing it either way.

Cute Hoor

Would you consider ringing Revenue, they would probably beable to give you the definitive position on your conundrum.

Geuze

Coinsguy wrote: »

I'm competelty lost.

I withdrew about €1,000 so it's under the limit. I just printed out the form 12 there but now I've some issues:

What does "Withdrew" mean?

To pay CGT you must have sold an asset.

Andrew Beef

The recent deadline is merely for payments of tax.

CGT on disposals made from January 2017 to November 2017 inclusive needs to be paid before 15 December 2017.

CGT on disposals made during December 2017 needs to be paid before 31 January 2018.

The disposals are then reflected in the actual tax return for 2017 (a CG1, Form 12, or Form 11 depending on one’s status).

The 2017 payments happen around now, but the return is a 2018 event (31 October 2018 deadline).

Coinsguy

Geuze wrote: »

What does "Withdrew" mean?

To pay CGT you must have sold an asset.

Sorry i mean withdrawing profit to my bank.

Coinsguy

Andrew Beef wrote: »

The recent deadline is merely for payments of tax.

CGT on disposals made from January 2017 to November 2017 inclusive needs to be paid before 15 December 2017.

CGT on disposals made during December 2017 needs to be paid before 31 January 2018.

The disposals are then reflected in the actual tax return for 2017 (a CG1, Form 12, or Form 11 depending on one’s status).

The 2017 payments happen around now, but the return is a 2018 event (31 October 2018 deadline).

The dates on the form from revenue are confusing me even more. Mentions 2016 still lost to be honest.

Coinsguy

All I want to do is declare that I've made profit in 2017 (under the 1270 threshold so thought it would be easy). Surely this is a common thing to do.

Andrew Beef

Coinsguy wrote: »

All I want to do is declare that I've made profit in 2017 (under the 1270 threshold so thought it would be easy). Surely this is a common thing to do.

Wait for the 2017 Form CG1 to become available or if you already submit a Form 12 or Form 11, wait until you’re submitting that.

You cannot disclose a 2017 capital gains tax event until 2018.

ebayissues

what if you made a loss ? so lets say you had 10k captal and exited all trades leaving ou with 9k. d yu have to eport the loss?

Andrew Beef

ebayissues wrote: »

what if you made a loss ? so lets say you had 10k captal and exited all trades leaving ou with 9k. d yu have to eport the loss?

Yes, with a view to being able to use it against a gain at some future date.

Coinsguy

Coinsguy wrote: »

All I want to do is declare that I've made profit in 2017 (under the 1270 threshold so thought it would be easy). Surely this is a common thing to do.

But do you actually need to declare anything if its under the 1270. I can't see it making sense to have to declare if under the exempted limit as isn't part of the point of having this threshold to prevent having to make returns on small gains, some which may not be even intentional (for example buying foreign currency for a holiday and making a small gain when changing back the remainder due to a change in exchange rate).

Another example you is you dont need to make a return on any gifts received once they are below 3k from each individual. But above 3k there is a return to pay and tax will be due.

Andrew Beef

No return is required for a gain <€1,270

sunrainmooncl

Sound Andrew Beef! I was wondering that.

From https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/cgt-exemptions.aspx:

"Personal Exemption
The first €1,270 of your gain (after deducting losses) is exempt from CGT."

MugsGame

You can't "withdraw profits" and claim that as a gain against the exemption. Depends on the investment type, but the whole gain is usually only realised when you sell the whole asset.

Your gain will be pro-rated e.g. if you invested €10,000 a year ago which went up 10%, and now withdraw your €1000 "profit", your notional gain for CGT is only 10% of what you withdrew, or €100.

sunrainmooncl

MugsGame wrote: »

You can't "withdraw profits" and claim that as a gain against the exemption. Depends on the investment type, but the whole gain is usually only realised when you sell the whole asset.

Your gain will be pro-rated e.g. if you invested €10,000 a year ago which went up 10%, and now withdraw your €1000 "profit", your notional gain for CGT is only 10% of what you withdrew, or €100.

What if you invest €1000 and now it's worth €10,000..

If you withdrew €1000, have you made any gain? €1000 in, €1000 out?

If you withdrew €1000 + €1,270, you've made a gain of €1,270 on top of the original investment. Do you need to fill out the CGT form(s)?

Cute Hoor

sunrainmooncl wrote: »

What if you invest €1000 and now it's worth €10,000..

If you withdrew €1000, have you made any gain? €1000 in, €1000 out?

If you withdrew €1000 + €1,270, you've made a gain of €1,270 on top of the original investment. Do you need to fill out the CGT form(s)?

It's pretty straightforward.
You invest €1000 and it's now worth €10,000.
You withdraw €1000 of the €10,000 (by 'withdraw' I presume you mean sell)
This is one tenth of your €10,000 valued investment
This equates to €100 of your original investment (one tenth)
So you have made a profit of €900 (€1000 - €100)
This €900 profit is liable for CGT, but of course no CGT liability arises because of your €1270 annual exemption.

It's simple and logical really

BTW, and I know this is coming 2 days too late, you should use your CGT allowance (€1270 or €2540 for couples) every year if possible, use it or lose it.

towger

Cute Hoor wrote: »

It's pretty straightforward.
You invest €1000 and it's now worth €10,000.
You withdraw €1000 of the €10,000 (by 'withdraw' I presume you mean sell)
This is one tenth of your €10,000 valued investment
This equates to €100 of your original investment (one tenth)
So you have made a profit of €900 (€1000 - €100)
This €900 profit is liable for CGT, but of course no CGT liability arises because of your €1270 annual exemption.

It's simple and logical really

BTW, and I know this is coming 2 days too late, you should use your CGT allowance (€1270 or €2540 for couples) every year if possible, use it or lose it.

To benefit from the 2,540 for couples, each of you must make a capital gain in your right ..... if only one person makes the gain, then only the allowance of 1,270 applies. However, transfers between spouses attract no tax, so if all the assets are held be one spouse, transfer some to the other partner before eventual sale so that you have use of both allowances.

Cute Hoor

towger wrote: »

To benefit from the 2,540 for couples, each of you must make a capital gain in your right ..... if only one person makes the gain, then only the allowance of 1,270 applies. However, transfers between spouses attract no tax, so if all the assets are held be one spouse, transfer some to the other partner before eventual sale so that you have use of both allowances.

If you are joint owners of the asset then presumably the €2540 applies.

Andrew Beef

Indeed it does

KellyXX

So going forward, If my husband had shares in his account (my name is not on the account at all) and then sold enough every year so that he made no more than €2540 (1270 for each of us since we are married) profit from those sold there would be no tax and no need to declare it at all, even if you already fill in form 11 for other reasons every year?

Cute Hoor

KellyXX wrote: »

So going forward, If my husband had shares in his account (my name is not on the account at all) and then sold enough every year so that he made no more than €2540 (1270 for each of us since we are married) profit from those sold there would be no tax and no need to declare it at all, even if you already fill in form 11 for other reasons every year?

If the account is in your husband's name only then you won't be able to avail of the €1,270 CGT allowance, only your husband will, that's my understanding. If you and your husband are filling out a Form 11 already then I would suggest you (your husband) declare it, no extra effort.

KellyXX

Cute Hoor wrote: »

If the account is in your husband's name only then you won't be able to avail of the €1,270 CGT allowance, only your husband will, that's my understanding. If you and your husband are filling out a Form 11 already then I would suggest you (your husband) declare it, no extra effort.

So we should spread the investments between two account then?
Sounds a bit silly. Either they want to treat us like a married couple or they dont.

Cute Hoor

KellyXX wrote: »

So we should spread the investments between two account then?

No need to spread between 2 accounts, one joint account is all you need. That's my understanding, I'm no expert on this, if in doubt contact Revenue, I find them most helpful.

Dardania

Relevant article: https://www.irishtimes.com/business/personal-finance/must-you-file-a-cgt-return-if-no-tax-is-due-1.3342384

ZeroThreat

Coinsguy wrote: »

Hey,

So last week I withdrew some of my profit (under 1270 euro so it's tax free). I only realised that you need to declare this even though there's essentially no tax on it to be paid - on this page (https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/how-do-you-pay-and-file-cgt.aspx) under the "How do you file your CGT return?" heading it says:

Form CG1 – if you do not usually submit annual tax returns
Form 12 – if you are a PAYE worker

Few questions:

1) I'm a paye worker and usually don't submit annual tax returns (although in the future i guess i will be?) so should i do both or just the form 12?

2) I withdrew a small amount last year that I didn't declare, how do I declare this now, I know I'll be hit with a small fine but still might as well get it dealt with.

3) Any general tips? Want to get this done and dusted asap and hopefully all done online.

thanks

Just wondering about whether a PAYE worker should fill out Form CG1 or Form 12 though?

I didn't see an answer to that question anywhere on the thread.

Should a CG1 be filled out if you believe your gain is a once off event, while From 12 should be used if you're a PAYE worker but receiving or likely to make regular capital gains over time?

KellyXX

ZeroThreat wrote: »

Just wondering about whether a PAYE worker should fill out Form CG1 or Form 12 though?

I didn't see an answer to that question anywhere on the thread.

Should a CG1 be filled out if you believe your gain is a once off event, while From 12 should be used if you're a PAYE worker but receiving or likely to make regular capital gains over time?

Or form 11