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Capital Gains Tax
Posted: 12 January 2018 13:42:40(UTC)

Joined: 21/06/2010(UTC)
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I m having to be careful to avoid a CGT liability this year and am looking at how CGT is calculated on investments. Particularly where we have purchased shares in the same Investment Trust.

I have found a page where it makes it seem simple (

It seems that rather than having to track the cost of individual shares I can just average out the cost where the same company is purchased. That appears to make the job a lot easier than I had imagined so as with all things 'official' I wondered if there was some devil in the detail somewhere that I need to be aware of?

Any advice appreciated, usually, we have the investments in ISA's but temporarily have some outside awaiting to be moved back. Hence the lack of knowledge on my part.

Tim D
Posted: 12 January 2018 14:53:57(UTC)

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Yes that's basically it. If you've got to the point where you've got 8000 shares and spent £16000 total to get them, in no matter how many separate buying events, then for CGT purposes you can simply count them as having a "book cost" of £2 each.

The thing which might mess that up is if you're a trader type and sold some of a holding you'd added to in the last 30 days... see this page for more on that.

(NB If you hold fund accumulation units those are a complete nightmare as you have to keep track of the book cost per unit increasing as income is reinvested by the fund; I know some expensive Wealth Manager/adviser type services keep track of this increase to "book cost" for you automatically... don't know if any of the DIY platforms do? Anyway, it's a good reason to avoid accumulation units like the plague, outside of SIPPs & ISAs).

For the purposes of making life simple at Self Assessment time, there are two numbers to watch. HMRC get more interested if you sold more than (from memory; just did mine & wife's) ~£44000 total assets or if the total gains were more than £11000. If you can answer no to both of those... you're fine, no more work needed. If you can't... you'll have to list everything.

Knowing how to use losses might be the other useful thing, if you have any.

Inter-spouse transfers maybe useful for effectively doubling your CGT allowance, if one half of a married couple's allowance is going unused. The few times I've done these it was on an advised service and they did actually go to the trouble of moving the shares over, selling them, and moving the cash back. Presumably you have to actually be seen to go through the motions.
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Mickey on 12/01/2018(UTC)
Posted: 12 January 2018 15:06:24(UTC)

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That's great, thanks Tim.
colin overton
Posted: 12 January 2018 17:01:41(UTC)

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If I recall properly from last year, when I paid CGT for the first time, the actual rate you pay depends on your income and the rate at which to pay income tax.
I arrange my income to be below the tax limit, but for "structural" (moving investments to an ISA) and investment reasons I decided to sell stocks last year without regard to whether I would have to pay CGT.
Being a non-IT payer the rate of CGT was "only" 10% and so I ended up paying a relatively some amount of CGT. I had costs and previously "sold-at-a-loss" investments that defrayed some of my CGT liability.
However the real issue for me that all assets that were sold had to be accounted for not just the amount I would be taxed on. Since I sold UTs in somewhat small amounts I had ~25 "sales" during 2016-17. If you use HMRC's suggested method you have to fill out a 15 field page for each sale. As an alternative (also suggested by HMRC) I submitted my own spreadsheet, having converted it to a pdf file. This was much quicker and I now keep an on-going spreadsheet of stock sales and associated costs.
This year I intend to be below the CGT threshold, unless I get too fearful before ~6th April 2018 of a communist government in the UK.
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