Undeclared dividends

bowlhead99

beeza650 said:

 In my IWEB account, I have HSBC GLOBAL AM UK GLOBAL STRATEGY ADVENTUROUS  (HSJTB) and VANGUARD INV UK LT LIFESTRATEGY 80 PERC EQUITY  (VVLSRE) split pretty much equally. Now if I sell one to buy to the other and vice versa (i.e. a 'swap') then would that be classed proper sale for CGT?

Not if I should take what you said literally.  You could sell one of them to buy more of the second, OR vice versa (sell some of the second to buy more of the first), which would presumably create a good-sized capital gain depending on the current price vs average purchase price of what you had sold. That is fine. But if you sold one to buy the other AND vice versa at the same time, you would effectively be sitting with new purchases of each of the things you had just sold, yes?

If you re-buy something within 30 days of selling it, the HMRC share identification / matching rules will kick in and say that (e.g.) the sale proceeds of selling HSBC GSA tomorrow should be matched for CGT purposes with the further purchases of HSBC GSA that you make - the same day as the disposal, or e.g. the day or week after -  rather than with the the purchases of HSBC GSA from whatever longer time ago, which had a lower price.   So the effect is that the sales you just made were of your new HSBC GSA shares at a cost per share similar to the disposal price per share, with minimal gain (or even a loss); the 30 day matching rule means the matching of disposal proceeds with those later purchases will happen despite you not actually owning those later-purchased shares until some point shortly after you've already done the disposal.

The rules were brought in to stop what you want to do, which is to be able to say that you sold the shares and created a CGT disposal event and used up annual exemption; they don't want you to do that while still owning the same type of shares having reset their base cost to a higher price.

If you own for example HSBC GS A (Acc) and V LS 80 (Acc) then one thing you could do is a sale of HSBC GS A (Acc) to fund a purchase of V LS 80 (Inc), as V LS 80 (Inc) is a share you do not currently own at all, and can not be matched with any disposal you make.  And then the next week you could sell V LS 80 (Acc), to fund a purchase of HSBC GS A (Inc); HSBC GS A (Inc) being a share you do not currently own at all, so a purchase of that share could not be matched with any disposal you make.

When you run the numbers you may find of course that you do not literally need to sell your entire holdings of HSBC and Vanguard funds in order to use up your full £12300 of gains exemption for this year, depending on how much profit you are sitting on with each - you may easily use up the exemption with a sale of only some smaller proportion of the total holdings and have no need to make further taxable gains on top. Or the other way around, if you don't use up every last penny of gains exemption in a year it is not the end of the world.

beeza650

Thank you... now...average share price, does IWEB tell you that I wonder??? Is it first in first out?
i buy 10 at 1 then another 10 at 0.5 making average 0.75. I sell 10, is the average now 0.5?

ColdIron

beeza650 said:

i buy 10 at 1 then another 10 at 0.5 making average 0.75. I sell 10, is the average now 0.5?

No. Sales do not have any effect on your purchase cost. Your average  cost per share/unit is still 0.75 until you make another purchase