You may be liable to pay capital gains tax on the disposal of shares. Your gain is usually the difference between what you paid for your shares and what you sold them for.
In some situation, you need to use the market value of the shares when working out your gain. For example, you gave them away as a gift or you sold them for less than they are worth.
There are also special rules for working out the cost of shares if you bought them at different dates and prices in one company. There are also some relief available on the disposal of shares which may reduce your capital gain tax or delay it to a future date.
Entrepreneurs’ Relief
If you sell shares in a trading company where you have at least 5% of ordinary shares and voting rights, you will pay 10% capital gains tax provided that other conditions are satisfied.
Gift Hold-over relief
If you give away shares in a personal company or unlisted company, you will pay no capital gains tax on the transfer of shares and the person you gave the shares to will have to pay tax when they sell the shares.
Enterprise Investment Scheme (EIS)
If you use a gain to buy unlisted shares in companies approved for EIS, it will delay or reduce your capital gains tax.
Seed Enterprise Investment Scheme (SEIS)
If you use a gain to buy new shares in small early-stage companies approved for SEIS, you will pay no capital gains tax on the gains up to £100,000.
Please get in touch if you need any advice in relation to the disposal of shares.
