Capital gains tax on shares

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doajob
Posts: 32
Joined: Thu Feb 03, 2011 1:23 pm

Capital gains tax on shares

Post by doajob » Tue Aug 27, 2019 9:38 pm

Hey, I have a few shareholdings in listed companies that are in profit. I was looking at the tax implications of selling... 30% capital gains tax, but there’s one section that is not super clear and I’d be grateful if someone could give some clarity... from https://www.vero.fi/en/individuals/prop ... vestments/

If the total selling prices during the calendar year do not exceed €1,000, sales profits are exempt from tax. The same goes for sales loss: losses cannot be deducted if the acquisition prices of assets sold during the year were no more than €1,000 in total.

Does this mean that lets say I have shared worth 10.000€ and I sell 999€ worth of shares this year, I pay no capital gains tax?

If I sold 2000€ worth of shares I’d be liable to pay tax on the gain from all of that sale?



Capital gains tax on shares

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betelgeuse
Posts: 3278
Joined: Thu Aug 29, 2013 1:24 am

Re: Capital gains tax on shares

Post by betelgeuse » Wed Aug 28, 2019 8:54 am

doajob wrote:
Tue Aug 27, 2019 9:38 pm
Hey, I have a few shareholdings in listed companies that are in profit. I was looking at the tax implications of selling... 30% capital gains tax, but there’s one section that is not super clear and I’d be grateful if someone could give some clarity... from https://www.vero.fi/en/individuals/prop ... vestments/

If the total selling prices during the calendar year do not exceed €1,000, sales profits are exempt from tax. The same goes for sales loss: losses cannot be deducted if the acquisition prices of assets sold during the year were no more than €1,000 in total.

Does this mean that lets say I have shared worth 10.000€ and I sell 999€ worth of shares this year, I pay no capital gains tax?
Yes.
doajob wrote:
Tue Aug 27, 2019 9:38 pm
If I sold 2000€ worth of shares I’d be liable to pay tax on the gain from all of that sale?
Yes.

doajob
Posts: 32
Joined: Thu Feb 03, 2011 1:23 pm

Re: Capital gains tax on shares

Post by doajob » Sun Sep 01, 2019 3:18 pm

Wonderful, thanks!

And on a separate note do these implied costs of acquisition apply to shares? I remember seeing an example on the Vero site before which showed that the CHG Hill was significantly lower because of these implied acquisition costs (which can be up to 40% of the purchased amount?)

Would be great if that’s possible!

Don’t remember seeing anything like this in other countries so any help to understand would be great.

doajob
Posts: 32
Joined: Thu Feb 03, 2011 1:23 pm

Re: Capital gains tax on shares

Post by doajob » Sat Sep 07, 2019 10:35 pm

I got the information about this from my broker.

They informed that when a share is sold the “acquisition cost” is probably not the best translation. It actually means the cost to purchase the share, including the actual value of the share at the time.

So if you buy a position for €10,000 and sell it 10 years later for €80,000.. instead of an “acquisition cost” of €10,000, you can use the 40% rule, which means you can use an acquisition cost of 40% of €80,000, which limits your gain to €48,000 (instead of €70,000).

Only really come into play for positions that win big.

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agroot
Posts: 228
Joined: Sat Dec 22, 2018 5:04 pm

Re: Capital gains tax on shares

Post by agroot » Sun Sep 08, 2019 2:03 pm

doajob wrote:
Sat Sep 07, 2019 10:35 pm
I got the information about this from my broker.

They informed that when a share is sold the “acquisition cost” is probably not the best translation. It actually means the cost to purchase the share, including the actual value of the share at the time.

So if you buy a position for €10,000 and sell it 10 years later for €80,000.. instead of an “acquisition cost” of €10,000, you can use the 40% rule, which means you can use an acquisition cost of 40% of €80,000, which limits your gain to €48,000 (instead of €70,000).

Only really come into play for positions that win big.
What about positions in foreign currencies? e.g. dollars. Is it calculated by converting the final gains in dollars to euros, or by subtracting final euro value by the initial cost in euro at the time of purchase?

doajob
Posts: 32
Joined: Thu Feb 03, 2011 1:23 pm

Re: Capital gains tax on shares

Post by doajob » Tue Oct 01, 2019 8:19 pm

I’m not sure about that but I am sure that the broker has their systems set up to calculate it in accordance with Finnish tax law.

My guess is that the cost in Euros is calculated when you buy using the official rate for that day and then another calculation when you sell.

With Nordnet at least you can see your account balance in euros at all times, even when your investments are in foreign stocks.


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