Capital Gains when company sells under 6 months from buying shares

Taxes
1

Hi everyone,

In Switzerland one of the criteria for not qualifying as a private investor is to hold the shares of a company for a minimum of 6 months.
Does anyone know what happens if for example I buy some shares at moment t0 and at t0+3 months the company sells out to another?
In that case the holding period won’t be 6 months but it won’t be that I sold my shares out of my own desire under those 6 months…it was just a merger&acquisition

Did anyone hit this situation before ?
Will they end up taxed as normal income as per marginal tax rate ? (would kind of suck)

Thanks.

2

This has been asked and answered umpteen times on the forum.

Admittedly, it’s not included as prominently or explicitly in the pinned guidepost at the top of the forum - although it seems it should be.

Getting classified as professional investor (10 days ago)
Professional Trader Status - Court Cases
Question about Professional trader status Capital gains tax and professional investor status
Considered Professional Trader Status and dividends
Does margin interest rate trading switch you to professional trader? - #6 by 1742
Interactive Brokers, which reports needed for tax declaration? - #23 by nabalzbhf
Taxation of capital gains on option trading - #5 by jay
Article on private vs professional investor
Tax rules for private investors labeled as professional traders
Investing abroad vs Swiss taxes
How to disclose stocks positions to tax authorities
Employer (bank) restricting the use of other brokers
Selling puts on SPY - #2 by San_Francisco
Investing with Robinhood > check with Robintrack.net - #9 by paka

Once and for all:

:point_right: Occasional purchases and sales of the same stock (or investment fund) within 6 months do not make one a professional trader and do not trigger capital gains tax for Swiss retail investors.

8 Likes
3

Thanks for the links.
Started reading. The conditions for professional investor I already knew just not how they get interpreted by the authorities.
It somehow seems that for particular cases it is not that 1-0, schwarz-weiss kind of answer.

My situation was purely shares in a startup (bought over forgeglobal, it is not listed publicly) and it seems the startup will sell soon as negotiations are ongoing.
Then if the valuation is high and as I just get transferred an amount of cash whether I want to sell my shares or not, then automatically I’m under 6 months of holding and a sudden gain (way different than the acquisition price) appears.

4

See the last sentence in my post above (which I added after the initial reply).

There are no „particular cases“. The tax administration can‘t and will not make a difference for one particular trade and tax it differently than the rest of your portfolio (unless it’s an elaborate tax avoidance scheme to disguise distributions as capital gains in stocks). Getting lucky on a stock is not taxable. Regardless of if you sold on your own volition/the market or through corporate transaction of a take-over. Not even within 6 months.

5

And an acquisition is not even something you control… there’s nothing professional investor about any of this.

(Even the people I know who day trade derivatives on the side are not classified as professional)

1 Like
6

Small caveat (since you didn’t mention it in your generally-worded original post or thread title):

These seem to be shares of a company that is not publicly traded and do not have a public market value. So make sure to be able to prove to the tax office that it is, as you claim, indeed a simple capital gain by stock purchase and subsequent sale. If it is an investment that anyone (with necessary funds) could have made and you’re not affiliated with the company as an employee or so, you will be safe.

7

the guidepost is a wiki article - you should be able to edit it :slight_smile:

1 Like
8

Thank you very much for all the info and clear explanation !
I owe you one.