Shock tax bill threat for investors as stock exchange comes to standstill
Shareholders could face large unexpected tax bills as a result of the breakdown of the London Stock Exchange today - the last day of the tax year.
UK share trading is almost at a standstill due to technical problems at the exchange, with figures for major indices and share prices unavailable – and no trading.
Those investors hoping to sell shares to cystallise a gain or a loss in order to cut or wipe out their capital gains tax liabilities could find themselves caught out if trading does not resume today, tax experts are warning.
Investors hoping to use up their £7,100 annual capital gains tax exemption by selling shares today face losing it completely if they are unable to carry out their plans by the end of the day. Those planning to offset capital gains or losses today against other transactions this tax year also face unexpected tax bills.
Frank Haskew at the English ICA’s tax faculty commented: ‘People who have left things until now could find themselves coming unstuck.’ John Whiting, tax partner at PricewaterhouseCoopers, said: ‘The moral of the tale is not to leave your tax planning until the last minute.’ Neither seemed optimistic that the Inland Revenue would have much sympathy with those caught out.
Some professionals involved in stock market trading speculated that any shareholder suffering losses as a result to today’s problems could have a case for legal action against the exchange.
Stock Exchange representatives have been unable to say when the problems will be sorted out. The difficulties followed wild swings in stock market prices following Monday’s legal ruling against Microsoft in the US, and reports that the exchange is considering a merger with the Frankfurt Exchange.
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