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MaichBlack
#31 Posted : Saturday, December 27, 2014 9:44:14 PM
Rank: Elder

Joined: 7/22/2009
Posts: 7,858
Boris Boyka wrote:
MaichBlack wrote:
Boris Boyka wrote:
Gordon Gekko wrote:
mulla wrote:
Kalameni wrote:
@ngapat very bold of yu picking memba.wish yu well.

Very bold of you to take a loan to buy stock when the market is not bullish. Interest 12% + CGT 5% + broker fees 3.8%=20.8%. Equity will have to really work hard for you to make it worthwhile. All the best.

Your computation has a fundamental flaw. CGT is 5% of the gain. If the seller had bought at 50 and sold at 55, CGT is 5% of 5 (55 - 50). And the CGT is levied on the seller, not buyer. And I've always thought broker fees is 2.1%, dropping to 1.85% for big trades.

@maka @GG hope you know that @ngapat said he has taken a 600k sacco loan of 12% then bought memba. So his intention is to gain and thus he will SELL later..from these @mulla is right by saying that ngapat has to sell EQT @ > 20% his buying price for him to realize anything. 12% loan repay,5%CGT(he will be a seller by then) 3.6% commision (minimum if he does in 100k +)…in fact CGT may be more if reality as the gvt doesn't know his loan.

Eish!!! Maths is difficult!!!! @GG has given you a nice explanation complete with an example. CGT is on gains not on gross. So if the shares are sold for 700K the 5% CGT will be on 100k NOT 700K.

@maichblack......Laughing out loudly Laughing out loudly take a pen and paper do maths pole pole kabla nikuonyeshe hujielewi.

First, do you agree or disagree with @GG's explanation on CGT? We might be saying the same thing in different ways. Make sure you answer this simple question. It is the basis of our divergence (or convergence).

Secondly, kindly indulge me. How can CGT be higher than 5% - Loan or no loan!!!
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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Boris Boyka
#32 Posted : Saturday, December 27, 2014 9:52:54 PM
Rank: Veteran

Joined: 11/15/2013
Posts: 1,977
Location: Here
Let him sell @20% up...1.2×48= 57.6
less commission 4.1% 57.6×.958= 55.18
Gains 55.18-48 = 7.18
Gains less CGT 7.18×.95 = 6.82
what % is this gain to the capital 6.82/48= 14.2 % given intres ya sacco ni 12% ngapat atabaki na approx 2%.....NOTE that commision nimetumia 4.2% once as estimate uone....or else it could be 2.1% of 48 + 2.1% of 57.6....nway hope you get the point.
Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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MaichBlack
#33 Posted : Saturday, December 27, 2014 9:57:29 PM
Rank: Elder

Joined: 7/22/2009
Posts: 7,858
@Elephant Man - I totally agree with you and you raise a very important point. Broker charges are known (fixed at certain publicly available rates) and should therefore automatically be deducted from any gains before applying CGT. Ignoring them will be pure robbery!!!

If I buy shares at 100k and sell them at 103k, KRA should not PRETEND that the 3k is my gain. They know VERY WELL it all went brokers.

Is KRA going to factor in broker charges? I'm not sure. This CGT is full of unanswered questions!!! How many of those questions have been answered in the last couple of weeks wazuans in the know can tell us.
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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Boris Boyka
#34 Posted : Saturday, December 27, 2014 9:59:54 PM
Rank: Veteran

Joined: 11/15/2013
Posts: 1,977
Location: Here
MaichBlack wrote:
Boris Boyka wrote:
MaichBlack wrote:
Boris Boyka wrote:
Gordon Gekko wrote:
mulla wrote:
Kalameni wrote:
@ngapat very bold of yu picking memba.wish yu well.

Very bold of you to take a loan to buy stock when the market is not bullish. Interest 12% + CGT 5% + broker fees 3.8%=20.8%. Equity will have to really work hard for you to make it worthwhile. All the best.

Your computation has a fundamental flaw. CGT is 5% of the gain. If the seller had bought at 50 and sold at 55, CGT is 5% of 5 (55 - 50). And the CGT is levied on the seller, not buyer. And I've always thought broker fees is 2.1%, dropping to 1.85% for big trades.

@maka @GG hope you know that @ngapat said he has taken a 600k sacco loan of 12% then bought memba. So his intention is to gain and thus he will SELL later..from these @mulla is right by saying that ngapat has to sell EQT @ > 20% his buying price for him to realize anything. 12% loan repay,5%CGT(he will be a seller by then) 3.6% commision (minimum if he does in 100k +)…in fact CGT may be more if reality as the gvt doesn't know his loan.

Eish!!! Maths is difficult!!!! @GG has given you a nice explanation complete with an example. CGT is on gains not on gross. So if the shares are sold for 700K the 5% CGT will be on 100k NOT 700K.

@maichblack......Laughing out loudly Laughing out loudly take a pen and paper do maths pole pole kabla nikuonyeshe hujielewi.

First, do you agree or disagree with @GG's explanation on CGT? We might be saying the same thing in different ways. Make sure you answer this simple question. It is the basis of our divergence (or convergence).

Secondly, kindly indulge me. How can CGT be higher than 5% - Loan or no loan!!!

CGT is on net gains....Agreed. the 5% is higher for his case because he is using a loan so the 5% will compound...e.g 12% of 48 the gvt takes 5% CGT but in reality ngapat has not made anything extra so the 12% comes to 12×.95.... thus he needs an extra coin to cover the 5%....still this extra coin gvt takes 5% of it as CGT..also he has to cover the 5% taken on extra coin...he makes an extra extra coin...gvt 5% of this extra extra coin.....hivo hivo....thus its compounding in nature. but if it is NOT A LOAN...the 5% is flat.
Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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MaichBlack
#35 Posted : Saturday, December 27, 2014 10:02:34 PM
Rank: Elder

Joined: 7/22/2009
Posts: 7,858
Boris Boyka wrote:
Let him sell @20% up...1.2×48= 57.6
less commission 4.1% 57.6×.958= 55.18
Gains 55.18-48 = 7.18
Gains less CGT 7.18×.95 = 6.82
what % is this gain to the capital 6.82/48= 14.2 % given intres ya sacco ni 12% ngapat atabaki na approx 2%.....NOTE that commision nimetumia 4.2% once as estimate uone....or else it could be 2.1% of 48 + 2.1% of 57.6....nway hope you get the point.

I already had the point!!!

These is exactly what @GG was saying all along!!! That is why I was asking if you agree with him. But it seems it is too hard for you to say you agree with him.

Now answer my second question.
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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MaichBlack
#36 Posted : Saturday, December 27, 2014 10:09:28 PM
Rank: Elder

Joined: 7/22/2009
Posts: 7,858
And @Boris I was not about borrowing to buy shares. Most wazuans know my opinion on that. But I am not criticising @ngapat either because I don't know his target percentage gain and what informs it.

My replies were focused on CGT only and what it applies to. On this I can see we are in agreement.
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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  | | Edit by user: Saturday, December 27, 2014 10:46 PM | Reason: Not specified
Boris Boyka
#37 Posted : Saturday, December 27, 2014 10:35:49 PM
Rank: Veteran

Joined: 11/15/2013
Posts: 1,977
Location: Here
MaichBlack wrote:
And @Boris I was not about borrowing to buy shares. Most wazuans know my opinion on that. But I am not criticising @ngapat either because I don't his target percentage gain and what informs it.

My replies were focused on CGT only and what it applies to. On this I can see we are in agreement.

@maich sawa. i agreed with GG in first and last sentences....but on mid sentence of seller part alichanganyikiwa he thought CGT was during buying yet it was being factored when @ngapat will be the seller...am also not against ngapats strategy ....only that i meant for him to realise a fair gain of >7% then he has to sell at >20%.
Everybody STEALS, a THIEF is one who's CAUGHT stealing something of LITTLE VALUE. !!!
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guru267
#38 Posted : Sunday, December 28, 2014 4:54:17 AM
Rank: Elder

Joined: 1/21/2010
Posts: 6,675
Location: Nairobi
I can't wait until this CGT thing is postponed for 6 months...

Its absolute bafoonery to launch a new tax without a framework or implementation plan!

These jubilants once again are showing how much of amateurs they are Sad
Mark 12:29
Deuteronomy 4:16
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hisah
#39 Posted : Sunday, December 28, 2014 5:59:48 AM
Rank: Chief

Joined: 8/4/2010
Posts: 8,977
guru267 wrote:
I can't wait until this CGT thing is postponed for 6 months...

Its absolute bafoonery to launch a new tax without a framework or implementation plan!

These jubilants once again are showing how much of amateurs they are Sad

No framework in place by this time is unbelievable. What is the tax reference date? Jan 1986, 1990, 2000, 2014??

Likely to be postponed until the guidelines are clear. It'd be foolish to implement CGT without a framework. It'll mess the market and ruin the party for the investors and the tax man.
$15/barrel oil... The commodities lehman moment arrives as well as Sovereign debt volcano!
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sparkly
#40 Posted : Monday, December 29, 2014 6:18:00 AM
Rank: Elder

Joined: 9/23/2009
Posts: 8,083
Location: Enk are Nyirobi
MaichBlack wrote:
@Elephant Man - I totally agree with you and you raise a very important point. Broker charges are known (fixed at certain publicly available rates) and should therefore automatically be deducted from any gains before applying CGT. Ignoring them will be pure robbery!!!

If I buy shares at 100k and sell them at 103k, KRA should not PRETEND that the 3k is my gain. They know VERY WELL it all went brokers.

Is KRA going to factor in broker charges? I'm not sure. This CGT is full of unanswered questions!!! How many of those questions have been answered in the last couple of weeks wazuans in the know can tell us.


The broker calculates and pays the tax on your behalf.

I see a challenge where shares are transferred to another broker. He will not know how much they cost you in the first place so you might be required to provide the info.
Life is short. Live passionately.
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