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Capital Gains Tax on EQUITIES
Rank: Veteran Joined: 3/12/2010 Posts: 1,199 Location: Eastlander
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If I sell my Centum today.. The 5% tax on gains is actually less than the transaction fees broker will charge me. Why not call for justification of high transaction fees? ..Let your light so shine before men, that they may see your good works, and glorify your Father which is in heaven...Matt5:16
- 1769 Oxford King James Bible 'Authorized Version
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Rank: Elder Joined: 7/22/2009 Posts: 7,912
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mlennyma wrote:You needed atmost 2.5% to count your eggs before,now you need 7.5 % to count anything,its a big jump. streetwise wrote:
HAPANA
This is the maths. If you gain 2.5% as before you will pay 5% CGT on the 2.5%.
This translates to about 0.125%, so you should be saying the your need atleast 2.625%. Simplify 2.7% is good to go
A big NO to both of you!!! Why? You still need the same percentage as earlier to break even. And if you simply break even you don't pay ANY CGT. Get it? And after that, you only pay 5 cent to every shilling you make. But the main issue here is that if you make nothing, you pay nothing so you earlier break even point will suffice. Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Elder Joined: 7/21/2010 Posts: 6,194 Location: nairobi
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May be my maths lesson wasn't covered well,I thought if my gain from my buying and selling price is 200,I will have paid commision of 1.8 or 2.1% of the total transaction value as commision and charges and further pay 5% of my 200 gain "Don't let the fear of losing be greater than the excitement of winning."
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Rank: Veteran Joined: 6/23/2011 Posts: 1,740 Location: Nairobi
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Any one who works with KRA please share the formulae.
I thought this is simple CGT=5%( original price*quantity - sell price*quantity)
OOPs when you get a negative then what..more education required
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Rank: Elder Joined: 7/22/2009 Posts: 7,912
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streetwise wrote:Any one who works with KRA please share the formulae.
I thought this is simple CGT=5%( original price*quantity - sell price*quantity)
OOPs when you get a negative then what..more education required
CGT = 5% * (Selling price - (buying price + commissions)) Any loses will be offset from future CGT in the same income stream but not necessarily same stock/share. What is not clear is if you offset the entire loss or 5% of the loss in future gains. Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Member Joined: 11/7/2013 Posts: 127 Location: Nairobi, Kenya
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Sparkly et al, help me out on this one kindly... A more interesting scenario is how will they treat bonus shares issued...for instance, after Longhorn's Bonus isssue in the year just concluded, my average buying price came to 6.5...if I sold today at 10...and considering I bought the whole lot at 16...will they consider it as a Capital loss or recalculate and use 6.5 as the buying price (which is not feasible as I actually paid 16/share, the rest were at 0/share) ??? Same goes for rights issues...my average buying price goes down after most rights...so shouldn't I be claiming Cap losses on all these trades??? I went into the (Ferry) industry knowing the same thing I knew with all other businesses I went into- Nothing. Then I built it from there. - Sheldon Adelson (Titans at the Table- Giants of Macau)
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Rank: Elder Joined: 7/22/2009 Posts: 7,912
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This thing is tricky. Another scenario. You buy 10000 shares of A at 10/=, then another 10000 of the same at 20/=, another 10000 at 30/= etc. Then sell 5000 share of the same at 25/=, how do they calculate the buying price? Do they use the average? Is that fair? Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good returns.
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Rank: Veteran Joined: 4/16/2014 Posts: 1,420 Location: Bohemian Grove
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MaichBlack wrote:This thing is tricky.
Another scenario.
You buy 10000 shares of A at 10/=, then another 10000 of the same at 20/=, another 10000 at 30/= etc. Then sell 5000 share of the same at 25/=, how do they calculate the buying price? Do they use the average? Is that fair? There is no way to know which lot of shares is being sold when you're selling 5000 unless each share is assigned a digital fingerprint
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Rank: User Joined: 8/15/2013 Posts: 13,237 Location: Vacuum
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MaichBlack wrote:mlennyma wrote:You needed atmost 2.5% to count your eggs before,now you need 7.5 % to count anything,its a big jump. streetwise wrote:
HAPANA
This is the maths. If you gain 2.5% as before you will pay 5% CGT on the 2.5%.
This translates to about 0.125%, so you should be saying the your need atleast 2.625%. Simplify 2.7% is good to go
A big NO to both of you!!! Why? You still need the same percentage as earlier to break even. And if you simply break even you don't pay ANY CGT. Get it? And after that, you only pay 5 cent to every shilling you make. But the main issue here is that if you make nothing, you pay nothing so you earlier break even point will suffice. Let me try to put in in figures If you by 1,000 shares worth 100,0000 and sellthe 1,000 shares at 150,000. The CGT will be 5%(150,0000-Transfer costs-100,0000) If Obiero did it, Who Am I?
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Rank: Member Joined: 1/25/2010 Posts: 344
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MaichBlack wrote:This thing is tricky.
Another scenario.
You buy 10000 shares of A at 10/=, then another 10000 of the same at 20/=, another 10000 at 30/= etc. Then sell 5000 share of the same at 25/=, how do they calculate the buying price? Do they use the average? Is that fair? they will have to choose an accounting principle to use, either FIFO (First in first out), LIFO (Last in last out) or weighted average method.
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Capital Gains Tax on EQUITIES
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