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# Stock question and tax

• 08-01-2020 8:52pm
Registered Users Posts: 403 ✭✭

Just wondering if I buy €10000 worth of stock and it rises in value by say 10% the same day for tax reasons is there a minimum time I have to hold it or if I sell it the same day do I just have to pay cgt on the €1000 profit sorryif this is a silly question thanks

• Registered Users Posts: 1,220 ✭✭✭

bizidea wrote: »
Just wondering if I buy €10000 worth of stock and it rises in value by say 10% the same day for tax reasons is there a minimum time I have to hold it or if I sell it the same day do I just have to pay cgt on the €1000 profit sorryif this is a silly question thanks

Let's say each share is worth 10 euro

You spend 10,000k

That is 1000 shares owned by you (bought at 10 each)

The shares will go up and down in value (appreciate and depreciate) as said company performs

You have gained or lost nothing until you sell the shares (s) so don't worry about tax,

Now Let's say you decide to sell 500 shares at 120 (their new current value /price ) each

That is 6000 income (500 shares x 120 euro)
You Purchased the first 500 shares for 5000k (500 x 100 euro ) so you gain a cash gain of 1000 euro

Now you need consider tax on the gain of 1000 euro

It's only when you sell you need to think about the tax

Your gains are subject to tax (CGT) at 33%
........

Bear in mind, in Ireland you have an annual exemption of 1270

So the first 1270 euro of your gains is exempt from the tax

For round figure

So if you make 5k profit as an example

5k less exemption 1270 equals 3730 profit
3730 by 33% tax =
1230.90tax due

Hope this helps

• Registered Users Posts: 403 ✭✭

Thanks for your help yes it does I just wasnt sure if there was a minimum holding time.I'm just starting to invest I was looking at shares in a company today if you had invested say 10000 in their shares today and sold them you would have made €1480 less your cgt

• Registered Users Posts: 1,728 ✭✭✭

wally1990 wrote: »

Let's say each share is worth 10 euro

You spend 10,000k

That is 1000 shares owned by you (bought at 10 each)

The shares will go up and down in value (appreciate and depreciate) as said company performs

You have gained or lost nothing until you sell the shares (s) so don't worry about tax,

Now Let's say you decide to sell 500 shares at 120 (their new current value /price ) each

That is 6000 income (500 shares x 120 euro)
You Purchased the first 500 shares for 5000k (500 x 100 euro ) so you gain a cash gain of 1000 euro

Now you need consider tax on the gain of 1000 euro

It's only when you sell you need to think about the tax

Your gains are subject to tax (CGT) at 33%
........

Bear in mind, in Ireland you have an annual exemption of 1270

So the first 1270 euro of your gains is exempt from the tax

For round figure

So if you make 5k profit as an example

5k less exemption 1270 equals 3730 profit
3730 by 33% tax =
1230.90tax due

Hope this helps

• Registered Users Posts: 1,220 ✭✭✭

bizidea wrote: »
Thanks for your help yes it does I just wasnt sure if there was a minimum holding time.I'm just starting to invest I was looking at shares in a company today if you had invested say 10000 in their shares today and sold them you would have made €1480 less your cgt

No, there is no minimum (or maximum time) you need to sell your shares by following purchase

Good luck in the market

• Registered Users Posts: 403 ✭✭

Thanks very much wally for your help I was looking at two other stocks as well but they went the other way really is gambling

• Moderators, Business & Finance Moderators Posts: 9,422 Mod ✭✭✭✭

bizidea wrote: »
Thanks very much wally for your help I was looking at two other stocks as well but they went the other way really is gambling

Only when you don't know what you are doing...

• Registered Users Posts: 5,245 ✭✭✭

Jim2007 wrote: »
Only when you don't know what you are doing...

Exactly. And the fact they are using the word "stock" suggests to me this is a Google/Wikipedia/YouTube merchant.

If you are op, then stop. And stop immediately. This isn't for you, and it is gambling, correct. Never ever confuse pub talk, an afternoon of googling, and a few YouTube videos, to person that knows what they are doing.

However, always possible the word stock is more common in Ireland now, just means I'm old

• Registered Users Posts: 403 ✭✭

myshirt wrote: »
Exactly. And the fact they are using the word "stock" suggests to me this is a Google/Wikipedia/YouTube merchant.

If you are op, then stop. And stop immediately. This isn't for you, and it is gambling, correct. Never ever confuse pub talk, an afternoon of googling, and a few YouTube videos, to person that knows what they are doing.

However, always possible the word stock is more common in Ireland now, just means I'm old

• Registered Users Posts: 403 ✭✭

If id invested in the shares I was looking at yesterday and sold today id be up almost 50% would that just be pure beginners luck

• Registered Users Posts: 14

bizidea wrote: »

Plus 500 has a demo mode. Give that a go for a few months. There's a big correction due, be very careful with your money.

• Registered Users Posts: 5,316 ✭✭✭

On the exemption of 1270. Do you still have to file a tax return if the gain is less than 1270?

• Registered Users Posts: 1,220 ✭✭✭

gavmcg92 wrote: »
On the exemption of 1270. Do you still have to file a tax return if the gain is less than 1270?

Yes you do

Regardless if you have a
Gain
Loss
Break even

If you dispose of the asset (sell, or gift it ) then you need to file the CGT return

• Registered Users Posts: 5,316 ✭✭✭

wally1990 wrote: »
Yes you do

Regardless if you have a
Gain
Loss
Break even

If you dispose of the asset (sell, or gift it ) then you need to file the CGT return

Thanks for that and as I have seen, CGT cannot be declared online and instead a paper return needs to be completed. Do you simply print out the pages necessary, fill them out while sticking your PPS on the top and send them in? There are a lot of sheets that I will be leaving empty and so I would rather save some paper and just print off the needed sections (personal details, PAYE income and CGT declaration)

• Registered Users Posts: 475 ✭✭

bizidea wrote: »
If id invested in the shares I was looking at yesterday and sold today id be up almost 50% would that just be pure beginners luck

100% yes! Guessing they were penny stocks.

Did you include the costs e.g. the spread. So a stock trades with a spread of \$1/\$2. So many people go OMG it only has to to go up \$1 to make money. That is 100% the same as saying a stock that trades \$100/\$101 going up to \$200.

Plus, stocks like that tend to have a low EMS, which means eventhough they went up, it is unlikely there is enough liquidity in the market to sell them after. There is also a big difference between looking at a company and actually purchasing it too. We all have looked at something and said "why didn't I buy, I would have made loads" or "I should have got out then and not back to Break even". Saying you would have made X amount if you had bought yesterday means nothing, what is the guarantee you would have sold at that level? For beginners I really recommend the book, The Naked Trader, can be found on amazon. It is light hearted but a good intro into the basics and what you need to know starting off. I have e-mailed the author a few times over the years and he got back to me quick enough too. I don't trade stocks anymore but it is a good place to start either way.

I mean this is a nice way OP, as you are asking these type of questions, you are not ready to trade. We all go through the phase at the beginning saying worrying about our profits, when in fact it is highly likely we will lose money in the markets!!

Set up a demo as said below, take 6 months to a year of research and get comfortable, then give a go with money you can afford to lose. The market will still be there and there will always be another stock!!!

On a side note, don't get involved in any courses for loads of money etc. all a scam. It is about making up your own decisions and not following others. Google pump and dump stock scams to give you a good idea. Even here, we are just a bunch of keyword warriors :cool::P

• Registered Users Posts: 1

I started investing a few months ago. Online with trading 212. Im careful about what companies I pick . For months beforehand I had been learning to follow charts, following companies digging deep. I try to do my homework as best I can. Im coming from a different start point as I started off with very little , only about 100 euro . And I have added in about 100 euro every week since. The idea being that as I add more I will also be learning more as I go. 3 months in I am up over 33%..

The only grey area for me is the tax set up. I have contacted some accountants for advice and they don't seem to know a whole lot about it.
Im a paye worker so all my tax affairs are sorted for me. I don't want to be drawing trouble on.myself unnecessarily with this. Especially as it has been immensely enjoyable and satisfying so far. Is there a way to self declare any gains online ? Or am I safer to get a "professional".