Author Topic: Struggling with CGT calculations  (Read 1979 times)

shanghaiMMM

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Struggling with CGT calculations
« on: April 02, 2022, 11:34:20 PM »
Morning all,

Firstly, apologies for a thread slightly similar to my last one (https://forum.mrmoneymustache.com/uk-tax-discussion/help-moving-money-from-gia-to-sipps/)

I've come to the point (or perhaps left it too late!) where I want to sell from my GIA and move the money into an ISA in the new financial year. I'm trying to calculate if I have CGT to pay but struggling. I have been slowly purchasing these funds since 2014 and so have many different purchase prices.

Sorry if these are very basic questions but I haven't found answers to them. If I sell £20,000 of my fund (an SP500 tracker, HSPX), I read an average purchase price is used. But which average, the average of the latest purchases prices, or the purchase prices from 2014?

Bed and Breakfast seems to have been outlawed in 1998 but 'Bed and ISA' is still fine. I presume, however, that this method will still incur CGT?


Edit: a CGT gave me these results when I tried:

Purchase price £7326 (price of very first purchase was £12.73 in 2014)
Sale price £20,000 (price now £34.81)
Income this year: £22,500
CGT - £37

Does that look right...?

Thanks for any help!

« Last Edit: April 02, 2022, 11:39:51 PM by shanghaiMMM »

Affable Bear

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Re: Struggling with CGT calculations
« Reply #1 on: April 04, 2022, 01:10:38 AM »
I am not a tax expert and as my shares have been in an ISA I havent been through the process personally, however you do have a capital gains tax allowance of £12,300 per year.

If you wanted to minimise any taxes you could sell shares up to your allowance for this year then wait 12 months for your allowance to reset in the new financial year and sell the rest, this would be more tax efficient and you could avoid paying any tax at all.

March just gone would probably have been the best time to do because you could have used last years Capital Gains allowance and then in April it would have reset and you could have sold the rest now.

Not 100% sure at all but I thought capital gains is calculated from the difference of the purchase cost at the time with what you have sold them for. Not sure about averages but I thought this would be calculated seperately from each purchase but yeah I have no idea!!


mikefromtheuk

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Re: Struggling with CGT calculations
« Reply #2 on: April 05, 2022, 06:49:45 AM »
Sorry to jump in on this thread, but I'm going through a similar process now, albeit not quite the same. I have money in a GIA, it's been there since around 2000/01, the organisation it's with don't have much of a choice of funds, so I figured I'd withdraw some of it at the start of the next tax year and use it to fund my ISA with a different provider.

I did think that an easy way would be to sell out £12300, so that cannot possibly all be gain and I definitely won't have any CGT to pay, but isn't there a need to declare the capital gain on my self-assessment, though? I'd still have to work out what I've gained, and that's the bit I'm struggling with. All mine was bought at the same time (just before 9/11, which was great timing on my part) but several of the fund names have changed at least once over the years. I have paperwork, masses of it, and I guess it might be in there. I was hoping that when I sell, the organisation might put it on the annual statement, but I haven't asked them.


mikefromtheuk

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Re: Struggling with CGT calculations
« Reply #3 on: June 15, 2022, 06:05:55 AM »
I have started the process selling out some of my general investment account to transfer the same money into a S&S ISA, and the chap dealing with it at Nationwide did say (while covering himself with "we are not able to give tax advice" disclaimers) that the absolute profit amount should be detailed on my annual statement, so this should make it easy to calculate what CGT, if any, is payable. I won't know until next May if that's the case, unfortunately.

Affable Bear

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Re: Struggling with CGT calculations
« Reply #4 on: June 20, 2022, 04:49:55 AM »
Fingers crossed, let us know if you figure it all out! It is definitely an area I have little understanding of

 

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