Capital Gains Tax and Dividends - Record Keeping

ColdIron

lindabea said:

ColdIron said:

lindabea said:

But how do I work out any transaction costs and stamp duty associated with the buying and selling of the units.   I haven't seen any of these costs shown on any Vanguard contract note.

That's because Vanguard Investor do not charge to buy or sell funds so there are no transaction costs and stamp duty does not apply to funds

That's great to know - it keeps things simple.  So, have I described the gain/loss calculation correctly in my previous post?    

Yes, it's fine. Strictly, for income units you should deduct any equalisation payments (received when you purchased your units) from your cost (or acquisition value) which will sightly increase your gain but if you are nowhere near the £12,300 exemption threshold you could disregard them

lindabea

Thank you for your reply, but I think there's something else I need to clarify.  It's regarding your comment about the equalisation payment.  My understanding is that the equalisation payment relates to group 2 units, and the way I would allow for this is to subtract the equalisation payment for group 2 units from the dividend payment that relates to the same group 2 units.  Group 1 units would not have any equalisation payment.  If I understand your comment correctly, it appears to be contrary to my understanding.  Can you please elaborate further.    

ColdIron

You don't need to subtract the equalisation payment (a return of capital) from the (earned) dividend payment from a group 2 distribution, they should be clearly identified and separate, You can simply disregard the (earned) dividend payment for the purpose of capital gains

This is a fairly neat explanation

https://www.willisowen.co.uk/help/equalisation-explained