If you are lucky enough to have some shares which have increased in value one way of reducing your liability to capital gains tax is to make full use of your annual exemption every year. (and your spouses if married)
Every year each tax payer has an annual exemption of €1270
For example if you bought some shares in January 2009 for €1000
and sell those shares in January 2010 for €3000 the CGT due is calculated as follows
€3000 – €1000 = €2000 Gain.
€2000 less annual exemption of €1270 is a taxable gain of €730 which is taxed at 25% so capital gains tax due is €182.50
Now if you have shares which have gained in value in 2010 but aren’t planning on disposing of them them you will loose the benefit of your €1270 annual exemption so my suggestion is every year sell at least just enough shares to have a gain of €1270 which makes full use of your annual exemption and ultimately reduces your capital gains tax liability.
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