Keeping record of purchased NYSE stocks

MaxterMind

If purchasing shares in some companies listed on the NYSE (I'm in the UK), do you suggest simply keeping a record of the stocks purchased, the date purchased on, and the price paid on an MS-Excel sheet in order to keep a record and to allow ease with which to determine, at some point in the future upon sale, whether there was a total tax year profit above the annual Capital Gains allowance?

Really I'm wondering if a very small scale purchaser of some stocks would keep this recorded on an Excel sheet, or if you would suggest some other specialist software which is, for some reason, better?

Thanks.

masonic

That's what I do, though I trade very infrequently so it is pretty easy for me to do the necesary sums.

MaxterMind

Out of curiosity, how would you calculate gain if you purchased, for example, x amount of shares in a company, then a few months later purchased y quantity of shares in the same company at a different price?
That is, if in future you sold only a portion of the the total quantity of x+y.
Obviously (presumably) it would not be correct to calculate the purchase price solely based upon x value or solely upon y value as the purchase price.

DireEmblem

I use google sheets linked to yahoo prices.  Even setup an email notification to tire of triggers if there's a lot of volatility.

bowlhead99

MaxterMind said:

Out of curiosity, how would you calculate gain if you purchased, for example, x amount of shares in a company, then a few months later purchased y quantity of shares in the same company at a different price?
That is, if in future you sold only a portion of the the total quantity of x+y.
Obviously (presumably) it would not be correct to calculate the purchase price solely based upon x value or solely upon y value as the purchase price.

Correct, all the shares you own of Company A - however you own or hold them - are completely homogeneous and interchangable.

So if you have 5000 shares bought at £1 each (total cost £5000) and you later bought 10000 shares at £1.50 each (total cost £15000), then in total you spent £20,000 buying the 15000 shares. So the big pile of 15000 shares cost, of average, £1.33333 each.

So when you later sell 3000 shares for £2 each (£6000), you compare the sale proceeds to the cost; and the cost of those shares was not £1 per share or £1.50 per share , it was the average cost of £1.333333 each. So the cost of the 3000 shares you just sold for £6000 was 3000x £1.333333, which is a total allowable cost of £4000. You made £2000 of gain

After selling 3000 of the 15000 shares which had cost, on average, £1.333333 each, you only have 12000 shares remaining, but they still cost, on average, £1.333333 each. So if you sold some more of those shares, you would still look at the cost of £1.333333 per share when calculating the cost of the shares sold, to figure out the gain on sale.

If, before doing any more sales of the pool of 12000 remaining shares (which you know have a total cost of 12000x£1.333 = £16000), you then bought 8000 more shares for £1.25 each (£10,000 total), you would now have a pile of 20000 shares, and their carrying cost of £16,000 + £10,000 = £26,000 works out at £1.30 each. So then when you next sell some shares, you are not using the first ever price you paid (£1) or the second price you paid (£1.50), or the old average price you paid (£1.333333); instead you would use the new average cost per share held, which is £1.30 per share.

To help you keep track of the average cost of the pool of shares you're holding at any given time, it makes sense to keep track on a spreadsheet or piece of paper from time to time, updating your records with every purchase or sale, and then every time you sold something you'd already know what your cost was and therefore what gain you were going to make. But if you can't be bothered, it's not the end of the world - you could simply work it out from first principles each time you did a sale, as long as you have you contract notes or purchase history in your online account.

MaxterMind

Thank you bowlhead99 for your detailed response. This is very helpful and very much appreciated!

DireEmblem

I have this for 212 to automatically pull contract notes into google sheets, and then revalue.
https://community.trading212.com/t/t212-contract-note-email-importer/15954
With some further jiggery pokery, you can get your spreadsheet to match up your sells to your buys in a FIFO order, but with low volume its probably just worth typing them in!

JamesRobinson48

MaxterMind said:

If purchasing shares in some companies listed on the NYSE (I'm in the UK), do you suggest simply keeping a record of the stocks purchased, the date purchased on, and the price paid on an MS-Excel sheet in order to keep a record and to allow ease with which to determine, at some point in the future upon sale, whether there was a total tax year profit above the annual Capital Gains allowance?

For purposes of declaring capital gains to HMRC you would need to measure the original purchase cost (and sales proceeds) of the stocks in £ sterling terms. Therefore I suggest at some point your spreadsheet should also factor in the prevailing foreign exchange rates (US$ versus £) on the respective purchase and sale dates.

MaxterMind

A slight aside: If stock is purchased which is listed on the NYSE and the American company pays a dividend, how is the dividend usually forwarded to someone who is resident in the UK? Is it by bank transfer?

masonic

MaxterMind said:

A slight aside: If stock is purchased which is listed on the NYSE and the American company pays a dividend, how is the dividend usually forwarded to someone who is resident in the UK? Is it by bank transfer?

Most people invest through an online broker, so it would turn up in their investment account initially and they may have an instruction with their broker to reinvest/pay out income or leave it in the account.

bowlhead99

MaxterMind said:

A slight aside: If stock is purchased which is listed on the NYSE and the American company pays a dividend, how is the dividend usually forwarded to someone who is resident in the UK? Is it by bank transfer?

The dividend (after withholding the relevant US income tax) would be paid electronically by the US company to the stockbroker who maintains the brokerage/ investment platform account through which you hold the stock. 

So it would appear in your account with your broker, and then you could log in to your broker account and withdraw withdraw the money from your broker account to your bank account - if you didn't prefer to keep it in the broker account and eventually re-invest it into something.