Lets just say that a company is about to be sold, it has to go to a vote and also pass through the government for approval. If I have just bought shares within the 12 month period. Will I have to pay a premium capital gains tax on those shares. Or can I leave the cash in that account for 12 months or reinvest in something else to avoid the cgt.
Hi @Mattyg1928,
The CGT rules don’t change just because the company is sold within 12 months of you buying shares. You’ll still need to pay CGT on any capital gain when you dispose of the shares.
Since you’ve held the shares for less than 12 months, you won’t qualify for the 50% CGT discount. You’ll need to use the ‘other’ method to calculate your capital gain, which means you can’t halve the gain.
You can’t avoid CGT by leaving the cash in your account or reinvesting it after the sale. Once the shares are sold (or compulsorily acquired), a CGT event happens and you must include any capital gain in your tax return for that income year.
You can reduce your capital gain by any capital losses you have, including carried-forward losses from previous years.
It’s a good idea to use the capital gain or capital loss worksheet to work out your exact gain or loss. Also, check if the company has a class ruling for the sale, as this can affect how the CGT rules apply.
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