How do we pay minimum Tax (Capital Gains) on Vanguard funds-30 day rule?

[Deleted User]

Transferring (selling) funds into a SIPP or ISA is a disposal and liable to CGT. Selling assets WITHIN a SIPP or ISA are liable to CGT.

Jeremy535897

I don't blame u for finding hard to follow my questions, I jot these notes down so I don't forget, however they don't come across in the best format for a question.
I read transferring normal funds into the SIPP say March 2022, would then get rid of any Capital Gains u had in that fund, BUT ONLY if u were putting it into a SIPP or ISA. Is that bulls__t?

Let's say you own shares in Marks and Spencer. If you move the shares from broker account A to broker account B, without actually selling the shares, there should be no disposal, which makes sense, because you haven't sold anything.

If you transfer shares to a SIPP, the SIPP is the new owner and you have made a disposal. A capital gain arises. There may be an income tax deduction as a separate issue.

For transferring shares into an ISA, see https://www.fool.co.uk/mywallethero/share-dealing/learn/can-shares-be-transferred-into-an-isa/

Which I interpret as selling my say 400k or 350k etc. Which has a Capital Gain of 100k or 50k, but if buy funds straight away, does this wipe out Capital Gains & then reset the new base cost to 400k or 350k?

If you sell Marks and Spencer and buy Marks and Spencer, see my reply on bed and breakfasting. Sell M&S shares costing £400,000 for £500,000, you have a £100,000 gain. Buy them again within 30 days for £500,000, you have no gain, but your cost is still £400,000 not £500,000 for capital gains tax. Sell M&S and buy Sainsburys and you pay tax on the gain, even if you buy Sainsburys within 30 days of selling M&S.

Or if I sold the £12,300 allowance each year, for 5 years, would that wipe out £62.500 of Capital Gains in year 6 if I sold again? Or if the new value is say £450k in another 5 years, what effect would it be by my selling £12,500 every year?
And would I be allowed to re-buy funds straight away?

If you have shares in M&S costing £400,000 worth £500,000, you have an unrealised gain of £100,000. So if you sold £12,300 x 5 = £61,500 of shares, you would have a gain of £12,300. Buy them back after 30 days, and their base cost has moved from £49,200 to £61,500 (ignoring price movements and dealing costs).

NottinghamMan

Thanks Purdy.
Right Jeremy & Thanks, U explain it clear.
And the selling & buying back notes too.
There's no hope for me is there ha ha. Just got to pay the Capital Gains Tax in years to come by looks of it.

NottinghamMan

How do I set this site up for email notifications does anyone know? Can't see anything in my settings.

Jeremy535897

Profile, edit profile, notification preferences.

NottinghamMan

Jeremy535897 said:

Profile, edit profile, notification preferences.

Thanks, I was just going into Profile & not edit Profile. All were unticked. 

NottinghamMan

U people that's kindly helped me on here, I'm understanding a touch more and gonna start new thread on this, but if u can answer to me, I'd appreciate it. And some of your words in the below which is getting me closer to understand it.

Capital gains washing out the base cost on index funds to utilise the personal allowance every year so in 10 years, I have a higher base cost for when start withdrawing.

If I'd bought unit trust index funds for 300k and 3 years later it's worth 400k, what amount do I have to sell to just use the Capital Gains personal allowance ie. Is it I can only sell £12,300 for 1 year? Doing that to reset the base cost.
And what would be my new base cost the next year if I din't re-buy the funds after 30 days?
What would be my new base cost if I did re-buy the funds after the 30 days?

Or is it if I only sell 1/4 of the whole funds ie. 100k, I only then pay tax on 1/4 of that 100k ie. 25k minus £12300 personal allowance means I pay 10% of £12700 left is £1270 is that right?
So then how do we work backwards to get it to only selling enough to use the personal allowance for Capital Gains £12300?

Is the base cost only going to go up by £12300 if I don't reset? So in 10 years, will be 10 x £12300 = £123,000, so £12,300 tax at that point?
If 20% Tax, Resetting each year would be worth it in 10 years.

I will probably be adding to these funds about 100k each year as well if that makes a difference to your answers.