Chapter 8 · Risk, portfolio and taxes
Capital gains tax
How it is charged, when it is withheld, and why the holding period matters.
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When you sell shares at a profit, tax is charged on the gain, not on the sale value, and your broker withholds it at the time of sale. You do not have to calculate and remit it yourself for ordinary share sales.
What determines the rate
- How long you held — short and long holding periods are treated differently.
- Whether you are an individual or an institution.
The practical point that does not change: a holding period boundary can be worth more than a small price move. If you are close to one, it is worth knowing where it falls before you sell.
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