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Posted Fri, 24 Feb 2023 07:09:00 GMT by Pavel
Good day! Would appreciate some advice on Capital gains from stocks and dividends: 1. Do I need to pay taxes on profits made by purchasing and selling shares on a stock exchange in my investment account (not ISA) if I keep money there for future trading? Or taxes are applicable only when I withdraw money from investment account to a regular account? 2. If losses on stocks trading for the tax year are higher than the profits, so overall there is a loss, does this need to be reported and filed to the HMRC? Thank you for your time!
Posted Mon, 27 Feb 2023 12:05:33 GMT by HMRC Admin 32
Hi,

Yes, you will need to pay taxes if the gains exceed the annual allowance. Further guidance is available here:

Tax when you sell shares

Thank you.
Posted Tue, 28 Feb 2023 01:48:30 GMT by Damion Yates
If you've sold within a tax year you may need to report that, being within the exchange doesn't matter it's not just when you withdraw. The value of shares in GBP will make up part of a Section104 pool average value, and there are matching rules depending on the times you sold and purchased which are complicated. I would recommend avoiding buying the same stock within 30 days if you want to make the calculations easier. Or rely entirely on the exchange's tax reporting feature to help provide the docs needed for the return. You don't need to report if the volume of shares sold was lower than £49,200 and you didn't gain more than £12,300 (***this goes down to £24,000 and £6000 in April***). If you made a loss, you still need to show your workings if the amounts sold were over £49k as mentioned. If they weren't you might still want to report this loss as you can use that years from now to offset later gains. IIRC you have ~3 years to declare a loss that you wish to use so you may have some from previous years too.
Posted Wed, 01 Mar 2023 12:02:09 GMT by Pavel
Thank you for the replies, Volume of shares sold and gains are greater than £49,200 and £12,300 respectively on the investment account, excluding the ISA. Tax year is still ongoing up to 5 April 2023, and to reduce the tax gains it would be beneficial to sell the loss making shares, right? Also, after the end of tax year 2023, I have up to the end of January 2024 to file the tax form, is that correct? Thank you for your time!
Posted Thu, 02 Mar 2023 03:23:54 GMT by Damion Yates
Note that I'm not a financial advisor so can't suggest when you should or shouldn't sell - I can generally quote common sense suggestions like "buy low, sell high" & "time in the market is better than timing the market". The debate over intentionally generating a capital loss on poorly performing stock to sneak under the limit (or record a capital loss for future years), is an interesting one and I'm undecided on my own investments tbh. Most of my investments sucked this year with just a few outliers. If you've realised a good gain, you've made money! The tax on the bit over £12,300 is 20% (or 10% if you're a low earner). If the tax owed is under £3k and you file the return by the 30th of December, you can tick a box to request this tax owed is made via PAYE tax code adjustments over the next year or two. I'd view this as an interest free loan from his majesty's revenue and customs!
Posted Fri, 03 Mar 2023 13:55:27 GMT by HMRC Admin 30
Hi Pavel,

HMRC cannot advise you when to sell any shares as this amounts to financial advise which we are not authorised to give.

Yes the due date for the 22/23 tax return is 31/1/24

Thank you. 

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