2 simple capital gains tax question

samach

I have just started to look how to pay CGT. This is my first time and I am baffled on two scenarios. It would be of great help if someone can answer that.

I have done a lot of day trading/ swing trading in 2020. I am trying to calculate what would I owe to Revenue. I am aware the 33% tax will not be applicable on the initial 1270 eur amount.

Question 1:
I am married and jointly assessed. I have done all the trading in my name. My wife never bought/sold any shares. When calculating how much tax is due, should I assume my tax free amount is 1270 OR 2540? (1270-my allowance + 1270-wife's allowance)

Question 2:
For trading, I have an investment account that I topup from my Irish Bank account. Lets assume I invested 10,000 euros initially. Made a profit after selling the stock next day. Now I have 12,000 euros in my investment account. I invest 12,000 again the next day and did not sell ever. How much tax is due for the end of year?
a) No tax due?
b) 2000 - 1270 = 730 * .33 = 241?
c) Only when you transfer the gains from investment account to Irish bank account, the tax is due?

Thanks in advance!

boring accountant

samach wrote: »

I have just started to look how to pay CGT. This is my first time and I am baffled on two scenarios. It would be of great help if someone can answer that.

I have done a lot of day trading/ swing trading in 2020. I am trying to calculate what would I owe to Revenue. I am aware the 33% tax will not be applicable on the initial 1270 eur amount.

Question 1:
I am married and jointly assessed. I have done all the trading in my name. My wife never bought/sold any shares. When calculating how much tax is due, should I assume my tax free amount is 1270 OR 2540? (1270-my allowance + 1270-wife's allowance)

Question 2:
For trading, I have an investment account that I topup from my Irish Bank account. Lets assume I invested 10,000 euros initially. Made a profit after selling the stock next day. Now I have 12,000 euros in my investment account. I invest 12,000 again the next day and did not sell ever. How much tax is due for the end of year?
a) No tax due?
b) 2000 - 1270 = 730 * .33 = 241?
c) Only when you transfer the gains from investment account to Irish bank account, the tax is due?

Thanks in advance!

1. You cannot transfer the annual allowance between spouses.

2. B. CGT is triggered by a disposal of shares. Reinvesting the proceeds doesn’t undo the disposal.

samach

Thanks a lot @boring accountant for the clarification

marizpan

I would advise you to look into ‘badges of trade’ and how this would impact the tax treatment.
Revenue have guidance on this that you’ll find from a quick google.