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!

A) Both US and UK. Note that the vest values and sale values need to be converted into GBP at those points in time for the UK tax. On the plus side there is a generous £12,300 tax free limit until this April. B) In some countries stocks that are older have different tax levels, this is not the case in the UK. Actually all stocks purchased, have a value and are added to a single value, an average (mean) holding value known as the Section 104 holding (https://www.gov.uk/government/publications/shares-and-capital-gains-tax-hs284-self-assessment-helpsheet/hs284-shares-and-capital-gains-tax-2019#how-to-work-out-the-gain-for-shares-in-a-section-104-holding). Even when you sell from your broker and it asks "old or new" that's irrelevant in UK tax and your choice was meaningless* If you had a vest within 30 days of one of your sales, you need to read up on the 30 day rule. I'm afraid this whole thing is quite complicated. C) There used to be some special share plans for specific UK shares in specific old-school UK companies, it's *extremely* unlikely from your description that your bank and its US share scheme are one of those approved schemes. *Unless you head to another country that treats this differently in which case, utilise the UK's tax free limit and sell the oldest (deemed most valuable, outside the UK) 1st. All hope is lost if you're from the USA as you have to pay tax on gain in both the US and UK. The treaty doesn't work that well for that.

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.

(Well done on gifting shares, this effectively doubles your capital gain allowance using your spouse) You don't say whether the shares he purchased were the same. If they were then things like the 30-day rule would come into play if this was within that time period after the sale of the ones you gifted. If they were just different shares and then sold shortly after in order to put into an ISA instead, then all that has happened is creeping closer to the capital gains limit for this tax year. He will have to declare, if the amounts involved are over four times the gain allowance. I.e. 12300×4=49200. This is just an annoying technicality, especially if the gain was well under the limit. A lot of people deliberately try to stay just under the gain limit, but depending on the markets, making £12k gain may involve large amounts of money. What I do is put all the sums and a written explanation into a PDF and upload it with the tax return. I don't end up paying tax but annoyingly I have to go through the effort of telling them, and they have to go through the effort of auditing this... I think they should reconsider this rule. Purchasing in an ISA does not require you to wait 30 days. Under some circumstances it can be advantageous to utilise the 30-day rule repurchasing shares (outside the ISA wrapper). It changes what the sale shares are matched against to the ones you have just purchased again, rather than the potentially quite low/old section 104 holding mean. So I guess you could technically call this a disadvantage of purchasing in an ISA in some rare circumstances. Otherwise normally purchasing in the ISA is just a good idea & almost certainly in your case.

It's not clear to me how there is a gain involved if this money is only being converted for the first time from HKD to GBP. You've simply moved the money in its same currency, in order to utilise a conversion spread fee that is far better than those provided by HSBC, which I suspect would be in the order of 2%! Various currency exchange companies will charge as low as between 0.15% and 0.25%. I'm guessing this was your plan. If you're converting back and forth, converting into HKG when the GBP is strong, then converting back when the GBP is weak, then this is Forex trading and obviously taxable at the point where you realise the gains into GBP. Basically treated like stocks and shares. What you've described in the post doesn't match this & simply has a few incidental fees involved.

They didn't live there for around 9* out of 27 years, 9/27 is 1/3rd (0.33). This is the private residence relief. You don't pay capital gains on property whilst living there, you do for the proportion when not. *They don't state months in the query, so they'll need to do the calculations more accurately, Dec vs Jan makes a notable difference. The rules also allow you to kind of fictitiously add 9 months to your time lived there. Also the purchase price and sale price can be tweaked. The base cost is the actual price spent buying the house. You can add costs such as major refurbishments like an extension, stamp duty (you don't pay tax twice), solicitors fees etc. Then the sale price is also less fees. This'll narrow the total gain a bit. HMRC Admin 2 is correct, they should work this out themselves or request professional assistance. It's not exactly trivial and not the sort of thing to simply ask on a forum for somebody to do the maths, especially when lacking loads of the details that only they know. I replied as I've gone though this just before 2020 and looked into all the nice (legal) tax avoiding things we could. My estimate might be useful if they're considering options. That tax bill will keep increasing of the price rises and add time goes by when not living there.

Sadly in 2020 you could have claimed letting allowance of up to £40,000 each which is well over the gain, you can still claim this if you also lived there whilst letting it out. Previously you could also have added more time (than 9 months) lived there when calculating the private residence relief ratio. Roughly: 2023-1996 = 27 years. You didn't live there 10 years. But you can add 9 months back, so you're looking at about 0.333 multiplier on the amount owed. 130000-36000 * .333 and divided by 2 for joint ownership... Just over £15k each You get £12,300 tax free capital gains each until this April when that limit halves! CGT for people at the 20% level on houses is 18% - the sale might take you into the 40% level, I'd ask a tax advisor... If your query was to roughly work out if it's expensive/worth it then my rough maths might help you decide. 18% on the rough estimate is £600 each... Not much given the total gain. A sale in 2020 world definitely have meant no tax. Do the maths in detail or ask a tax advisor.