what is the tax situation with investing?

JourneyMan8 · 20-09-2018 2:29am #1

over the past few weeks iv opened a demo account and read up on trading strats etc... i've always thought id love to give it a go, get rich and live the life(joke well 99.99%)....

what is the tax situation on a person using say derigo, i never thought about this, i always thought it was a gambling type thing, you bet your money you win and off you go to spend your money.

is there anywhere that explains the ins and outs of trading from ireland. a easy to read guide of what steps you have to climb over to do it safely.

side note - trading is one of the worst explained things on the internet for someone new trying to get a grasp of. it's so scattered.

drunkmonkey · 20-09-2018 2:44am

The first €1270 a year is free, anything over that is 30% tax.

For tax free betting on share you'd have to spread bet.

Pkiernan · 20-09-2018 2:50am

drunkmonkey wrote: »

The first €1270 a year is free, anything over that is 30% tax.

For tax free betting on share you'd have to spread bet.

Revenue may tax regular trading (day trading for example) as normal income, subject to marginal rate.

JourneyMan8 · 20-09-2018 3:01am

drunkmonkey wrote: »

The first €1270 a year is free, anything over that is 30% tax.

For tax free betting on share you'd have to spread bet.

okay there's a start thanks. the first 1270 is free, does it only start once it is your money(you withdraw it and it's in your pocket/bank) - or does everything you have in your portfolio online have risk of being taxed?

I assume there are many cons to spread betting so if people favour regular taxed trading over it?

Pkiernan wrote: »

Revenue may tax regular trading (day trading for example) as normal income, subject to marginal rate.

i wouldn't be a serious trader at all, just lot of long terms darts.

im starting to think trading would be more hassle than good for someone that just wants to throw darts and enjoy it.

cmac2009 · 20-09-2018 5:36am

Why is it the government here seem to discourage investing and saving, with both a low threshold and high taxes on savings. In the UK the threshold is 11k odd and they encourage saving/investing with a 20k ISA allowance each year.

Skelet0n · 20-09-2018 7:10am

JourneyMan8 wrote: »

okay there's a start thanks. the first 1270 is free, does it only start once it is your money(you withdraw it and it's in your pocket/bank) - or does everything you have in your portfolio online have risk of being taxed?

As soon as you realise a gain/loss it’s eligible for tax. That is whenever you sell a stock. Revenue doesn’t care where that money is.

Skelet0n · 20-09-2018 7:11am

cmac2009 wrote: »

Why is it the government here seem to discourage investing and saving, with both a low threshold and high taxes on savings. In the UK the threshold is 11k odd and they encourage saving/investing with a 20k ISA allowance each year.

So you’ll buy property as an investment.

OEP · 20-09-2018 8:19am

cmac2009 wrote: »

Why is it the government here seem to discourage investing and saving, with both a low threshold and high taxes on savings. In the UK the threshold is 11k odd and they encourage saving/investing with a 20k ISA allowance each year.

This is something that never comes up around budget time either, at least I've never noticed it. I guess it's because not that many people are actively trading or investing with their own money, so the government isn't too concerned with winning/losing votes here. All these limits are doing is targeting the small guys, an increase to UK levels isn't going to make any difference to someone making massive Capital Gains every year. We're losing out on so much money compared to people in the UK

Skelet0n · 20-09-2018 9:03am

OEP wrote: »

This is something that never comes up around budget time either, at least I've never noticed it. I guess it's because not that many people are actively trading or investing with their own money, so the government isn't too concerned with winning/losing votes here. All these limits are doing is targeting the small guys, an increase to UK levels isn't going to make any difference to someone making massive Capital Gains every year. We're losing out on so much money compared to people in the UK

It's still 1000 punts for feck sake, hasn't even been adjusted for inflation, just converted to Euro.

OEP · 20-09-2018 10:36am

Genuine question, how do you go about lobbying for a change to something like this?
I believe it's not even on their radar, as it doesn't effect enough people. A change to this wouldn't lose them any votes but they could swing it as another way of helping the "squeezed middle". After all, it only matters to those with a small bit of spare cash to invest - not the big guys and not the social welfare people.

Skelet0n · 20-09-2018 10:40am

OEP wrote: »

Genuine question, how do you go about lobbying for a change to something like this?
I believe it's not even on their radar, as it doesn't effect enough people. A change to this wouldn't lose them any votes but they could swing it as another way of helping the "squeezed middle". After all, it only matters to those with a small bit of spare cash to invest - not the big guys and not the social welfare people.

Write your TD. The same way any change is brought about.

Dardania · 20-09-2018 10:46am

I intend trying to address it via: http://www.welfare.ie/en/Pages/Consultations.aspx#strawman
A nice simple solution like ISA could be merged in with it

ballyharpat · 20-09-2018 12:40pm

Pardon my ignorance, if I invest 10k and make €1200 every year and pull out after 5 years, am I under the threshold? Or does it only work if I pull it out every year and reinvest and make €1200 every year that way.

Skelet0n · 20-09-2018 2:11pm

ballyharpat wrote: »

Pardon my ignorance, if I invest 10k and make €1200 every year and pull out after 5 years, am I under the threshold? Or does it only work if I pull it out every year and reinvest and make €1200 every year that way.

Whenever you realise the gain you are eligible for the tax. If you realise 1200 a year, you pay no tax. If you realise the gain after 5 years, you pay no tax on 1270.

ballyharpat · 20-09-2018 3:05pm

Thanks for that, it really is a strange system, there is nothing to encourage any long term investment. In other countries they encourage you to invest
and have a reduced rate of tax on profits held for more than 12 months, we really are into property only in this country, Sheep.

Skelet0n wrote: »

Whenever you realise the gain you are eligible for the tax. If you realise 1200 a year, you pay no tax. If you realise the gain after 5 years, you pay no tax on 1270.

Jim2007 · 20-09-2018 8:10pm

Skelet0n wrote: »

So you’ll buy property as an investment.

Well I don’t know if that was the intention...

But here in Switzerland capital gains from investing are tax free, while capital gains on property are taxed. The result is that everyone has a portfolio and very few are interested in getting on the property ladder.

To be considered a trader and have your gains taxed as income you need to execute ten trades or more per month for at least six months of the tax year, so there is a fair bit of flexibility there.

JourneyMan8 · 21-09-2018 3:21pm

gonna jump in with a stupid question, with it being an online thing, how do revenue know what you have and when you get over the limit etc, or is it simply up to you to declare??

relax carry on · 21-09-2018 8:12pm

JourneyMan8 wrote: »

gonna jump in with a stupid question, with it being an online thing, how do revenue know what you have and when you get over the limit etc, or is it simply up to you to declare??

It's self assessment. You track your gains and return them each year.

https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/how-to-calculate-cgt.aspx

Note that Revenue already have access to a wide array of information regarding worldwide and domestic sources of income relating to individuals and companies. These sources increase each year.

Sugar Free · 22-09-2018 10:34am

Jim2007 wrote: »

Well I don’t know if that was the intention...

But here in Switzerland capital gains from investing are tax free, while capital gains on property are taxed. The result is that everyone has a portfolio and very few are interested in getting on the property ladder.

To be considered a trader and have your gains taxed as income you need to execute ten trades or more per month for at least six months of the tax year, so there is a fair bit of flexibility there.

Aren’t there other criteria that would also have you fall under the trader classification for Switzerland ? E.g. trading on margin, trading options, realizing gains in one year equivalent to more than 50% of your income etc? I admit I’m not that familiar with it, I just thought there were a few other criteria.

Still though, the Irish system really doesn’t incentivize investing beyond pensions and property (which if it was purely as an investment would usually be a bad one).

Skelet0n · 22-09-2018 10:41am

https://www.google.ie/amp/s/irishtechnews.ie/budget-2019-needs-to-brexit-proof-ireland-deloitte/amp/

Deloitte recommend reduction in CGT to help Brexit proof economy.

robp · 22-09-2018 11:05pm

Skelet0n wrote: »

It's still 1000 punts for feck sake, hasn't even been adjusted for inflation, just converted to Euro.

It is worth pointing out that £1270 Irish punts in 2001 was worth about €1948 in 2017 so yeah there has been significant deterioration if it was £1270 in 2001.

JourneyMan8 · 23-09-2018 12:23am

don't get why it's taxed when you haven't withdrawn it yet though, that's what i don't understand. has totally put me off it

eeepaulo · 23-09-2018 12:48am

JourneyMan8 wrote: »

don't get why it's taxed when you haven't withdrawn it yet though, that's what i don't understand. has totally put me off it

I think you mean the profit from selling a share that's in your degiro account?

Because you've realised the gain on the asset, you bought an asset (the share), you have then sold an asset (same share), you realised the gain (profit, or loss). If you sell multiple shares during a tax year you can offset realised losses against realised gains.

The important word is realised. If you simply hold the share in your degiro account it isn't realised until you sell the share.

If you didn't pay tax on your gains until you removed it from degiro, your degiro account would be a tax free vehicles (until you withdrew the cash)

OEP · 23-09-2018 12:52am

robp wrote: »

It is worth pointing out that £1270 Irish punts in 2001 was worth about €1948 in 2017 so yeah there has been significant deterioration if it was £1270 in 2001.

1000 punts is €1270

JourneyMan8 · 24-09-2018 1:38am

eeepaulo wrote: »

I think you mean the profit from selling a share that's in your degiro account?

Because you've realised the gain on the asset, you bought an asset (the share), you have then sold an asset (same share), you realised the gain (profit, or loss). If you sell multiple shares during a tax year you can offset realised losses against realised gains.

The important word is realised. If you simply hold the share in your degiro account it isn't realised until you sell the share.

If you didn't pay tax on your gains until you removed it from degiro, your degiro account would be a tax free vehicles (until you withdrew the cash)

Oh I see so people still get away with long term trading with out hassle of worrying about tax? They just pay the tax when the shares are sold etc. That sounds a bit better, if I'm reading that right

dickface · 24-09-2018 7:44am

OEP wrote: »

1000 punts is €1270

Back when we switched to the Euro, would be closer to 2000 now

OEP · 24-09-2018 7:51am

dickface wrote: »

Back when we switched to the Euro, would be closer to 2000 now

I know but that's what he meant when he said it had been the same since punts.

Skelet0n · 24-09-2018 9:54am

JourneyMan8 wrote: »

Oh I see so people still get away with long term trading with out hassle of worrying about tax? They just pay the tax when the shares are sold etc. That sounds a bit better, if I'm reading that right

You pay your tax at the end of the year on realised gains - realised losses.

You can pay with other money if you don't want to take money out of your degiro account.

OEP wrote: »

I know but that's what he meant when he said it had been the same since punts.

What he said.

Sabre Man · 24-09-2018 10:44am

Isn't there also a time limit for losses where you have to have held the shares for a certain time before the loss can be offset?

relax carry on · 24-09-2018 11:16am

Sabre Man wrote: »

Isn't there also a time limit for losses where you have to have held the shares for a certain time before the loss can be offset?

You are talking about the bed and breakfast rule I think.

Disposal of shares within four weeks of acquisition
The FIFO (First In First Out) rules are modified in any case where shares of the same class are bought and sold within a period of four weeks. Where shares are sold within four weeks of acquisition the shares sold are identified with the shares acquired within that period. Furthermore, where a loss accrues on the disposal of shares and shares of the same class are acquired within a four week period, the loss is not available for offset against any other gains arising. Instead the loss is only available for set off against any gain that might arise on the subsequent disposal of the shares so acquired in the four week period - this provision does not apply where there is a gain on the disposal.

valoren · 24-09-2018 1:53pm

cmac2009 wrote: »

Why is it the government here seem to discourage investing and saving, with both a low threshold and high taxes on savings. In the UK the threshold is 11k odd and they encourage saving/investing with a 20k ISA allowance each year.

We just don't have a culture for owning shares as an investment*. It's property, getting in early on pyramid schemes or having a strategic edge in your gambling portfolio that is the way to generate additional wealth here. (joking btw)

There is no established idea here that you are perfectly free to buy ownership in any listed company and have that as an asset for the years and decades ahead. The idea being that the euro you invested today should be worth a multiple in a few decades time e.g. the price of a can of Coke will be more in thirty-forty years time.

Slowly but surely this attitude will change particularly with low cost brokers making the markets easily accessible. The bear markets, the panics, the plunges, the crashes will happen of course but we would be wise to remember that they're only temporary but more importantly they are the best times to buy stocks and shares.

We really need to have ISA's and the Junior ISA (for kids) equivalent here as they would be instant access as well. Life happens and sometimes you need the cash. When you open a pension here then the money you invest is effectively in a blackhole, inaccessible until you're retiring. Access to your money should not be that black and white. Stock ISA's in the UK have the tax benefit of our pensions here.

I would love to see a situation where young adults just starting to work fill out their income returns from the dividends they got for the year from companies like Shell, Johnson & Johnson, Colgate et al that they've owned since before they could even read and which they will still own when they're deciding to retire.

I guess there is vested interest in financial ignorance and financial institutions will happily cream fee's from people's ignorance and the billions pooled into their funds whereas the reality is that we would all be better off, literally, by setting aside some savings, investing them in companies that grow their earnings and dividend cash payments and holding them perpetually through the generations.

* this struck me when watching a programme about Lotto winners. A Dublin family had won €500,000 and their initial plans were to buy two new cars at €40k each, a big family holiday 25k, give cash gifts and then pay off their mortgage (about 150k I think it was).

If they were clued in, they'd have taken €100k fun money from the winnings to keep their cars serviced, gone on the holiday and all of that with the 100k. Then while keeping on with the manageable mortgage payments with the 400k they could have invested it in shares at say 3.5% yield and gotten after tax income of €11,900. Assuming if they just spent the dividend income on expenses it would have the following income (assuming an average annual 8% dividend increase across the portfolio) then;

After 10 years they would be getting 23k, after 15 years it would be 35k, 20 years gives 51k, 25 years gives 75k, 30 years 110k, 35 years is 162k and 40 years gives 293k. All without touching the principal and compounding year after year like clockwork.

That's without reinvesting. The cash would be spent when it was received. Now imagine if they reinvested the dividends and/or reinvested with even more cash. Imagine a rocket blasting off from a blasting rocket. They could have set their kids up to perpetually receive income from their business interests for generations with all and any expenses they might have paid for by that initial decision to forego instant gratification.

Sugar Free · 24-09-2018 4:12pm

valoren wrote: »

We just don't have a culture for owning shares as an investment*. It's property, getting in early on pyramid schemes or having a strategic edge in your gambling portfolio that is the way to generate additional wealth here. (joking btw)

There is no established idea here that you are perfectly free to buy ownership in any listed company and have that as an asset for the years and decades ahead. The idea being that the euro you invested today should be worth a multiple in a few decades time e.g. the price of a can of Coke will be more in thirty-forty years time.

...

I guess there is vested interest in financial ignorance and financial institutions will happily cream fee's from people's ignorance and the billions pooled into their funds whereas the reality is that we would all be better off, literally, by setting aside some savings, investing them in companies that grow their earnings and dividend cash payments and holding them perpetually through the generations.

* this struck me when watching a programme about Lotto winners. A Dublin family had won €500,000 and their initial plans were to buy two new cars at €40k each, a big family holiday 25k, give cash gifts and then pay off their mortgage (about 150k I think it was).

If they were clued in, they'd have taken €100k fun money from the winnings to keep their cars serviced, gone on the holiday and all of that with the 100k. Then while keeping on with the manageable mortgage payments with the 400k they could have invested it in shares at say 3.5% yield and gotten after tax income of €11,900. Assuming if they just spent the dividend income on expenses it would have the following income (assuming an average annual 8% dividend increase across the portfolio) then;

After 10 years they would be getting 23k, after 15 years it would be 35k, 20 years gives 51k, 25 years gives 75k, 30 years 110k, 35 years is 162k and 40 years gives 293k. All without touching the principal and compounding year after year like clockwork.

That's without reinvesting. The cash would be spent when it was received. Now imagine if they reinvested the dividends and/or reinvested with even more cash. Imagine a rocket blasting off from a blasting rocket. They could have set their kids up to perpetually receive income from their business interests for generations with all and any expenses they might have paid for by that initial decision to forego instant gratification.

You’ve made posts like these across various forums over time. I really hope there’s some people out there paying heed to them when they’re laid out so simply. It’s a shame so many people have such short-term thinking.

24-09-2018 4:23pm

cmac2009 wrote: »

Why is it the government here seem to discourage investing and saving, with both a low threshold and high taxes on savings. In the UK the threshold is 11k odd and they encourage saving/investing with a 20k ISA allowance each year.

The government do give investment tax relief in the form of pension schemes.

They just suffer from the same problem as most of us.
It is hard to give up short term income (tax collected today) and put it into savings that pay off in the future (higher tax collected in the future) when there are various demands on the money today.

Having said that I would like more tax efficient and simple savings options.

AlexisM · 25-09-2018 2:03pm

valoren wrote: »

cmac2009 wrote: »

Why is it the government here seem to discourage investing and saving, with both a low threshold and high taxes on savings. In the UK the threshold is 11k odd and they encourage saving/investing with a 20k ISA allowance each year.

With the 400k they could have invested it in shares at say 3.5% yield and gotten after tax income of €11,900. Assuming if they just spent the dividend income on expenses it would have the following income (assuming an average annual 8% dividend increase across the portfolio) then;

After 10 years they would be getting 23k, after 15 years it would be 35k, 20 years gives 51k, 25 years gives 75k, 30 years 110k, 35 years is 162k and 40 years gives 293k. All without touching the principal and compounding year after year like clockwork.

That's without reinvesting. The cash would be spent when it was received. Now imagine if they reinvested the dividends and/or reinvested with even more cash. .

I don't want to detract from your central message that saving is good and a better idea than instant gratification but your numbers are a bit optimistic. To get (and spend) a 3.5% dividend AND see an 8% annual increase, the underlying shares would need to grow by 11.5% annually. That would be difficult to achieve.

eeepaulo · 25-09-2018 4:28pm

AlexisM wrote: »

I don't want to detract from your central message that saving is good and a better idea than instant gratification but your numbers are a bit optimistic. To get (and spend) a 3.5% dividend AND see an 8% annual increase, the underlying shares would need to grow by 11.5% annually. That would be difficult to achieve.

I believe they are saying the dividend itself will grow 8%

3.5*1.08 not 3.5+8

AlexisM · 25-09-2018 9:31pm

eeepaulo wrote: »

AlexisM wrote: »

I don't want to detract from your central message that saving is good and a better idea than instant gratification but your numbers are a bit optimistic. To get (and spend) a 3.5% dividend AND see an 8% annual increase, the underlying shares would need to grow by 11.5% annually. That would be difficult to achieve.

I believe they are saying the dividend itself will grow 8%

3.5*1.08 not 3.5+8

I think that's unlikely as the dividend would then be over 70% by year 40.

For the dividend (€ amounts) to grow by 8%, the underlying share has to increase by 11.5% if they have taken a 3.5% dividend.
Starting at the 400,000, a 3.5% dividend is 14,000. An 8% increase on 14,000 gives 15,120 as the 'required' year 2 dividend. If the dividend yield remains at 3.5%, you need capital of 432,000 to provide this. To leave you with 432,000 after taking 14,000 year 1 dividend, you need pre-dividend capital of 446,000 - which is an 11.5% increase on your starting 400,000.
400,000 * 1.115 = 446,000
Take 3.5% dividend of 14,000 gives remaining capital of 432,000 to start year 2
Year 2 dividend = 3.5% of 432,000 = 8% increase on 14,000 = 15,120

eeepaulo · 25-09-2018 10:20pm

AlexisM wrote: »

I think that's unlikely as the dividend would then be over 70% by year 40.

For the dividend (€ amounts) to grow by 8%, the underlying share has to increase by 11.5% if they have taken a 3.5% dividend.
Starting at the 400,000, a 3.5% dividend is 14,000. An 8% increase on 14,000 gives 15,120 as the 'required' year 2 dividend. If the dividend yield remains at 3.5%, you need capital of 432,000 to provide this. To leave you with 432,000 after taking 14,000 year 1 dividend, you need pre-dividend capital of 446,000 - which is an 11.5% increase on your starting 400,000.
400,000 * 1.115 = 446,000
Take 3.5% dividend of 14,000 gives remaining capital of 432,000 to start year 2
Year 2 dividend = 3.5% of 432,000 = 8% increase on 14,000 = 15,120

What they did was take a shortcut, its not really a % growth of the dividend yield %, its a percentage growth of the actual dividend cash amount.

http://dividendchampions.uk/CompanyList?id=4

This site maps the FTSE dividend companies that consistently grow the actual dividend, its not the divi % andim sure these companies know that increasing the dividend amount each year is important to shareholders.

You dont get 70% of the worth of your shares after 40 years, you will get 100% of your initial dividend yield as a dividend income after 9 years at 8% actual growth of the dividend amount (no reinvesting or taxes

AlexisM · 26-09-2018 3:10pm

eeepaulo wrote: »

AlexisM wrote: »

I think that's unlikely as the dividend would then be over 70% by year 40

What they did was take a shortcut, its not really a % growth of the dividend yield %, its a percentage growth of the actual dividend cash amount.

Yes - and that's what I was replying to.

But whether it's the rate or the € amount, the only way a 3.5% yield dividend can increase over the long term by 8% per annum is if the underlying business grows by 11.5%. It's just maths, no assumptions required.

If you think 11.5% total return is achievable, great. I think it's a bit ambitious and I'm not sure it's fair to convince people into the investment world with unrealistic examples.

johnnykilo · 26-09-2018 9:36pm

Sorry to go a bit OT.

I've been participating in my company's ESPP since 2016. I know I should have declared them and paid tax on them the last 2 years but I'm only getting around to filling in the Form 12s now. Will there be a penalty for doing it for 2016 at this stage does anyone know?

dickface · 27-09-2018 7:50am

Deleted User wrote: »

The government do give investment tax relief in the form of pension schemes.

They just suffer from the same problem as most of us.
It is hard to give up short term income (tax collected today) and put it into savings that pay off in the future (higher tax collected in the future) when there are various demands on the money today.

Having said that I would like more tax efficient and simple savings options.

Does there exist a pension scheme that has < 1% AMC ? Such a shame some of the benefits of pensions is lost due to the high fees

valoren · 27-09-2018 10:37am

AlexisM wrote: »

I don't want to detract from your central message that saving is good and a better idea than instant gratification but your numbers are a bit optimistic. To get (and spend) a 3.5% dividend AND see an 8% annual increase, the underlying shares would need to grow by 11.5% annually. That would be difficult to achieve.

As another poster pointed to it's the increase of the dividend cash payment. The idea being that the principal invested amount is not touched at all. The principal will pay out an annually increasing dividend cash payment.

An example would be below.

$100,000 invested in Altria with an initial yield of 5.26%.
Payment is taxed at 15%.

Year 1 dividend $4471

As the company is shareholder friendly we see that on average they have increased the annual dividend by 8%. So it's the initial $4,471 figure that will increase annually.

You see announcements like this every year. https://www.marketwatch.com/story/altria-board-oks-dividend-increase-to-80-cents-a-share-2018-08-23. In that case it was a 14% increase. I'm assuming an average pay out increase % of 8%.

As such year 2 expected dividend then becomes $4,828. (an 8% increase)

You decide that you won't reinvest the dividend but simply collect the cash.
The expectation will be that Altria continues to increase the cash dividend. This is decided by management obviously. It could stop but such dividend aristocrats are attractive to investors because they ensure they can meet an annual payout (and the increase).

After 5 years it's $6,083 (6% yield on cost i.e. the amount invested)
After 10 years it's $8,938
After 15 years it's $13,132
After 20 years it's $19,295.

So after 20 years without touching the initial 100k, you're getting a 19% return on investment from the dividend payment alone.

With the magic of compounding now in high gear after 25 years the income is $30k. After 30 years, $44k, after 35 years, $66k.

Charlie Munger was right when he said that the hardest part of building wealth was to get to 100k in savings. "The first 100k is a bitch". From that point on your money is working for you. When you reinvest all or some coupled with additional capital investment you see how powerful investing becomes. You never touch the principal. The underlying shares will be worth whatever the market deems them to be worth. You just make sure initially you invest at a fair price.

Obviously it's risky to invest 100k in one company (just look at the mess generational stalwart General Electric is in) and that's where diversification across similar companies spreads the risk but the underlying principle of dividend growth investing still applies.

AlexisM · 27-09-2018 2:31pm

I'm not disputing the arithmetic. Compound interest is good. Compound interest is great.

I am pointing out that for a company with a 3.5% dividend yield, a long-term 8% growth in the dividend payout requires the company to have underlying growth of 11.5%. That is all... Pop a simple company cashflow into Excel and confirm it yourself.
It is quite an ask to be able to identify a diversified portfolio of investments with future underlying growth of 11.5%. If you feel you can do this, great. Most investors cannot.

The J Stands for Jay · 28-09-2018 6:32pm

dickface wrote: »

Does there exist a pension scheme that has < 1% AMC ? Such a shame some of the benefits of pensions is lost due to the high fees

I'm in one

denismc · 28-09-2018 6:49pm

johnnykilo wrote: »

Sorry to go a bit OT.

I've been participating in my company's ESPP since 2016. I know I should have declared them and paid tax on them the last 2 years but I'm only getting around to filling in the Form 12s now. Will there be a penalty for doing it for 2016 at this stage does anyone know?

Most of these schemes are operate within "benefit in kind" rules so the only tax liability you will have is when you profit from the sale of your shares and from any dividends you are receiving.
So if haven't made money on the sale of shares then there is no tax.
You can declare any dividends on PAYE online, you shouldn't get penalized but will pay tax on these.

johnnykilo · 28-09-2018 8:24pm

denismc wrote: »

Most of these schemes are operate within "benefit in kind" rules so the only tax liability you will have is when you profit from the sale of your shares and from any dividends you are receiving.
So if haven't made money on the sale of shares then there is no tax.
You can declare any dividends on PAYE online, you shouldn't get penalized but will pay tax on these.

Thanks for getting back to me, no I haven't sold any shares yet. Sorry I should have mentioned I get the shares from my company at a 15% discount so my understanding was I was eligible to pay 20% tax on this 15% discount.

denismc · 29-09-2018 7:24am

johnnykilo wrote: »

Thanks for getting back to me, no I haven't sold any shares yet. Sorry I should have mentioned I get the shares from my company at a 15% discount so my understanding was I was eligible to pay 20% tax on this 15% discount.

You would have to check with your payroll, but many companies offer schemes like this. You probably have to hold onto these shares for 3 years to avoid paying tax.
Like I say whoever does your pay should be able to explain it to you.

Taylor365 · 01-10-2018 9:40pm

Country is still in the 50s financially and industrially.

Up until last year, you could claim up to £5,000 TAX FREE DIVIDENDS just over the border in the north.

That's the equivalent of having just over €105,000 locked up in a REIT paying 4.67% a year (O for example).

It'll never change here, it's a social state. Wonder what way it will go across the way....

delta_bravo · 02-10-2018 8:48pm

Just wondering is it possible to offset share losses against dividends income? If I make twenty euro in dividends but lost €100 on share investment am I liable to pay tax

valoren · 03-10-2018 11:42am

Taylor365 wrote: »

Country is still in the 50s financially and industrially.

Up until last year, you could claim up to £5,000 TAX FREE DIVIDENDS just over the border in the north.

That's the equivalent of having just over €105,000 locked up in a REIT paying 4.67% a year (O for example).

It'll never change here, it's a social state. Wonder what way it will go across the way....

Well said.

We should have ISA equivalents where the dividends are tax free up to a maximum amount. €5,000 would be a good initial limit. It let's you build up the income. You're typically investing with money that has already been taxed and dividends, from the US for example, will take the 15% as is.

Dardania · 03-10-2018 11:49am

delta_bravo wrote: »

Just wondering is it possible to offset share losses against dividends income? If I make twenty euro in dividends but lost €100 on share investment am I liable to pay tax

I don't believe so. CGT is payable on one, and income tax etc. on the other

Taylor365 · 03-10-2018 6:31pm

valoren wrote: »

Well said.

We should have ISA equivalents where the dividends are tax free up to a maximum amount. €5,000 would be a good initial limit. It let's you build up the income. You're typically investing with money that has already been taxed and dividends, from the US for example, will take the 15% as is.

€5000 would be a massive limit to start for dividends!

€1000 allowance on divs and bump cg allowance to €5000.

It'd be a start and get people interested in being responsible with their money!

Most people i know are idling either in their current account or the, god forgive me, credit union.

what is the tax situation with investing?

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