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_galump(Newbie)Newbie
21 May 2021

Rather simple, I have one personal trading account for stocks. I'm invested in certain stock and a relative gave me some money as they wanted to invest too without opening an account.

If I sell the stock and it's time to pay CGT will we be taxed twice? eg:

I pay tax for the entire stock that I sold, send money back to relative - will they have to pay tax again, or does that count as a donation?

or

I sell off the stock, send them the money, and we both pay tax separately?

Thanks

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1,607 views
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Most helpful reply

Cratsky(Master)Master
21 May 2021

Put simply - you own the trading account and therefore any transactions on CGT assets (such as shares) are held against your name. Therefore, you are liable for any CGT/tax consequences as a result of transacting on that share trading account.

Cash is not a CGT asset. Therefore, when you settle a trade, pay any tax liability out of your own pocket and decide to give your relative cash - this has no tax consequences for your relative. In this situation at no time will your relative be liable for tax as they have not held a CGT asset in their name or transacting on a CGT asset.

You can choose to give your relative cash (net of the tax you've had to pay on the transaction) or the full cash amount (and you are not reimbursed for the tax you've paid). Good luck.

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Most helpful reply

Cratsky(Master)Master
21 May 2021

Put simply - you own the trading account and therefore any transactions on CGT assets (such as shares) are held against your name. Therefore, you are liable for any CGT/tax consequences as a result of transacting on that share trading account.

Cash is not a CGT asset. Therefore, when you settle a trade, pay any tax liability out of your own pocket and decide to give your relative cash - this has no tax consequences for your relative. In this situation at no time will your relative be liable for tax as they have not held a CGT asset in their name or transacting on a CGT asset.

You can choose to give your relative cash (net of the tax you've had to pay on the transaction) or the full cash amount (and you are not reimbursed for the tax you've paid). Good luck.

RichATO(Community Support)Community Support
24 May 2021

Hi @galump

The advice provided by @Cratsky is correct.

The tax liability for any capital gains made on the shares will sit with you.

You can find more information on CGT events affecting shares and the records you need to keep on our web site here.

RichATO

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