Taxes on capital gains from stocks

119 posts in this topic

One more question:

say my broker tells me the current value of stuff I originally bought for X is now Y.

Great they pay tax on my behalf, takes some hassle away. But if I sell it, how much cash will go into my pocket, Y or Y minus some tax?

It would be bad to believe you are richer than you actually are...

 

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48 minutes ago, Gambatte said:

One more question:

say my broker tells me the current value of stuff I originally bought for X is now Y.

Great they pay tax on my behalf, takes some hassle away. But if I sell it, how much cash will go into my pocket, Y or Y minus some tax?

It would be bad to believe you are richer than you actually are...

 

 

X  minus 26% tax on the profit after the jahrfreibetrag is used up (1602€ for married couples). That’s a reason I don’t try to sell during market corrections, the only sure winner would be the broker and the taxman. 

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4 minutes ago, mtbiking said:

 

Thanks.

You mean Y - (Y-X)*0.26, right?

Is this regardless of how long you held it?

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6 minutes ago, Gambatte said:

Thanks.

You mean Y - (Y-X)*0.26, right?

Is this regardless of how long you held it?


Yes and yes, but that’s only half the truth. 26% is  the maximum, if your personal tax rate is lower than that (for example, in retirement) then you pay only your personal tax rate. And you can always move to a more tax- liberal place.

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Alles klar, thanks

 

What if I moved the stuff to a different broker, will the new broker know the original cost to me was X? If they don't, they lack info x calculating the tax...

I guess they do know, like the "old" broker has to inform them when the move takes place...

 

 

 

 

 

 

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8 minutes ago, Gambatte said:

Alles klar, thanks

 

What if I moved the stuff to a different broker, will the new broker know the original cost to me was X? If they don't, they lack info x calculating the tax...

I guess they do know, like the "old" broker has to inform them when the move takes place...

 

 

 

 

 

 


Everything is automatically done, I’m on my third broker. All the relevant information is passed over.

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One more question:

 

Say I buy funds for X, I hold them and do nothing for N years, and then I sell for Y, with Y-X greater than N*jfb, with jfb = Jahresfreibeitrag (or whatever is called).

 

How do they justify that I must pay tax 0.26 * (Y-X-jfb), rather than 0.26 * (Y-X-N*jfb) ?

 

I fear the answer is like: they don't, you simply must pay what the rule say, like it or not, taxes are not intended to be fair nor logic, no matter what they keep telling us.

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59 minutes ago, Gambatte said:

One more question:

 

Say I buy funds for X, I hold them and do nothing for N years, and then I sell for Y, with Y-X greater than N*jfb, with jfb = Jahresfreibeitrag (or whatever is called).

 

How do they justify that I must pay tax 0.26 * (Y-X-jfb), rather than 0.26 * (Y-X-N*jfb) ?

 

I fear the answer is like: they don't, you simply must pay what the rule say, like it or not, taxes are not intended to be fair nor logic, no matter what they keep telling us.


yeahh, that would be nice but the jfb doesn’t accumulate. If it’s any consolation, the political parties on the left are itching to change the rules again and just apply the income tax rate to any profit made by evil capitalists like you or me that won’t follow Scholz’ lead and park all their savings in an authentic German sparplan with 0.1% per annum. 

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14 hours ago, mtbiking said:


Everything is automatically done, I’m on my third broker. All the relevant information is passed over.

That´s only true if you´re transferring between German brokerages. Transferring from foreign ones will mean that they calculate your profit assuming your cost was zero. You´ll then have to file a tax return the following year and claim back what you overpaid (if you still have proof of the "Anschaffungskosten"). I had to go through that, so I know.

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15 minutes ago, jeba said:

That´s only true if you´re transferring between German brokerages. Transferring from foreign ones will mean that they calculate your profit assuming your cost was zero. You´ll then have to file a tax return the following year and claim back what you overpaid (if you still have proof of the "Anschaffungskosten"). I had to go through that, so I know.


yes, I know, I assume he’s asking about German brokerages.

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33 minutes ago, mtbiking said:

yes, I know, I assume he’s asking about German brokerages.

Yes, German broker.

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It also depends on when you bought and how long you hold the stuff you bought 

 

eg I bought a DAX tracker around 1997. tax laws then mean I do not pay tax on the gain, but now its different of course

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45 minutes ago, yesterday said:

It also depends on when you bought and how long you hold the stuff you bought 

 

eg I bought a DAX tracker around 1997. tax laws then mean I do not pay tax on the gain, but now its different of course

 

It used to be like that and fonds bought back then (before the law changed) can still be sold tax free. We also own some. But that's irrelevant to the present discussion.

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7 minutes ago, mtbiking said:

 

It used to be like that and fonds bought back then (before the law changed) can still be sold tax free.

 

I don't think thats true any more - you might want to verify that with @PandaMunich if she has time.

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2 hours ago, yesterday said:

It also depends on when you bought and how long you hold the stuff you bought 

 

eg I bought a DAX tracker around 1997. tax laws then mean I do not pay tax on the gain, but now its different of course

 

1 hour ago, mtbiking said:

 

It used to be like that and fonds bought back then (before the law changed) can still be sold tax free. We also own some. But that's irrelevant to the present discussion.

 

1 hour ago, HEM said:

I don't think thats true any more - you might want to verify that with @PandaMunich if she has time.

 

It's true, if you sell funds bought in 2008 or earlier, the increase in value incurred up to 31.12.2017 is not taxable and the increase between 31.12.2017 and the selling date is tax-free up to 100,000€ (every time you sell such an "old" fund, you chip away at this 100,000€ tax-free allowance).

 

The profit you make selling stocks bought in 2008 or earlier is always not taxable.

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There were a few of questions, regarding the UK I didn't find in the thread.

 

UK has a tax rate on capital gains depending on your income tax bracket (0%, 10% or 20%).

I am not sure if the income tax bracket is calculated with only UK income or worldwide income if you are a non resident in the UK.

UK/German Tax treaty assumes 15% and German capital gains / dividend / interest rate percentage is 25%.

 

1. Assuming your gains are under the tax free allowance in the UK, you pay 0%. What is then paid then in Germany?

2. Assuming you buy a pot of shares and then sell each year some to make a 'profit' of <800 Euros, is there any tax to pay in Germany?

3. As a non UK resident, do you get a capital gains allowance if you apply for a personal allowance there?

4. This 800 Euros allowance, is this for capital gains, dividends, or for both?

5. Does holding shares for >10 years make a difference?

 

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