Calculating CGT tip

TBC15

Anyone else think the above is incorrect but don't want to get involved in a vendetta?

Don't bother, worked it through a few times, works a treat.

msallen

TBC15 wrote: »

I wish all my faux pass could be exited so gracefully.

It was anything but graceful.

bowlhead99

TBC15 wrote: »

Anyone else think the above is incorrect but don't want to get involved in a vendetta?

Don't bother, worked it through a few times, works a treat.

It would save you a step if instead of doing

CGT Allowance / (1 - 1/ratio of current value to original cost)
where 'current value to original cost' is 1.3255 in example above

you just did instead:

CGT Allowance / (1 - ratio of original cost to current value)
where original cost to current value is 0.7544 in example above

In other words if you've put the figures in back to front you'll have to do an extra "1 / ", whereas you could just put them the easier way round. Presumably to know your gain percentage for the whole holding you must know your cost for the whole holding and current value for the whole holding, so you could just stick them into the formula the appropriate way around and not need to do an extra 'one over' once you were executing the formula.

TBC15

The chances of remembering this one year on absolute zero, is there anywhere to park useful stuff on the board?

TBC15

Are we not over thinking this one?

CGT allowance/£ gain per share (or unit)

Edit. No this gives No of units/Shares to sell.

bowlhead99

TBC15 wrote: »

The chances of remembering this one year on absolute zero, is there anywhere to park useful stuff on the board?

No, other than making a thread a "sticky" and then by the time there are 200 useful tips it will take many many pages of scrolling to get to any new content.

As you suggest, the simplest way to see how many of your shares you can afford to sell is to see how much profit you would make per share if you sold one (assuming no costs to sell), and decide how much gain you'd like to make, and then, either by dividing the latter my the former or just by trial and error, figure out how many shares in total you should sell.

Remember of course you can deduct your selling costs (eg £10 broker fee) off the sales proceeds to get the net proceeds of sale for the real calculation, so after you've done the really simplistic version above you can then see if you can squeeze out another few shares within the limit of the gain you want to make. Of course the share price might change a bit when you actually place the order to make your sale, so you will need to look at the price you're offered carefully if a small amount of tax on a small amount of shares makes a big difference to your life.

Brynsam

capital0ne wrote: »

Thanks Bowlhead, and Tom99, my tactic worked. By posting an answer that wasn't quite right challenges people to put it right, whereas a simple query usually results in a link to aa CGT calculator or no reply whatsover.

Many thanks to both of you

I'd prefer the CGT calculator to this sort of balderdash!

IanManc

capital0ne wrote: »

Thanks Bowlhead, and Tom99, my tactic worked. By posting an answer that wasn't quite right challenges people to put it right, whereas a simple query usually results in a link to aa CGT calculator or no reply whatsover.

Many thanks to both of you

No one asked a question, so you weren't posting an answer.

No one was challenged.

You weren't using a "tactic".

You posted nonsense and then tried to cover it up by pretending that you did it on purpose.

Everyone realises that.

:rotfl:

cloud_dog

Tried to ignore this thread but....

No. Of Shares to sell = CGT Allowance / (Current Price - Buy Price)

capital0ne

capital0ne wrote: »

Simple formula time

CGT Allowance / (1 - 1/gain) where the gain of 32.55% is represented as 1.3255

Thanks all

I knew I was correct in my very first post except for one small step - adding on the CGT allowance.

So here's an even simpler formula:

So share value to sell = CGT_allowance/percentage_gain + CGT_allowance
So in my example gain of 32.55% and CGT = £11,300 (for this tax year)
Share value to sell = 11,300/0.3255 + 11,300 = 46,015.82

Shares to the value of £46,015 to be sold before 6th April it is then.

cloud_dog was good as well:
No. Of Shares to sell = CGT Allowance / (Current Price - Buy Price)
The rest of us must try harder I think this deserve three claps now: :T:T:T