Calculating Capital Gain on Halifax / Llodys Sharedealing

kla75

I have a non ISA Sharedealing account on Halifax and am trying to understand how I can calculate the capital gain for some shares I sold.

Let's say I purchased 4x5=20 shares at 4 different dates/prices, and sell 15 shares on the same date. Halifax pools all shares into one transaction and doesn't provide any details which of my shares were actually sold. They also don't provide any logic on how the system works, eg. first in, first out. How would one calculate the capital gain in that case, given that the purchase prices are different? Halifax support simply says it's a non managed account and they wouldn't provide a capital gain overview, and no other platform would either. 

Thanks a lot for any advice!

Thrugelmir

For CGT purposes the purchases are pooled. The average purchase price per share inclusive of fees & stamp duty is what you need to use in calculating the gain. Easiest way to track everything is on a spreadsheet.  

eskbanker

kla75 said:

I have a non ISA Sharedealing account on Halifax and am trying to understand how I can calculate the capital gain for some shares I sold.

Let's say I purchased 4x5=20 shares at 4 different dates/prices, and sell 15 shares on the same date. Halifax pools all shares into one transaction and doesn't provide any details which of my shares were actually sold. They also don't provide any logic on how the system works, eg. first in, first out. How would one calculate the capital gain in that case, given that the purchase prices are different? Halifax support simply says it's a non managed account and they wouldn't provide a capital gain overview, and no other platform would either. 

Thanks a lot for any advice!

It's not up to Halifax to explain the logic - the rules are owned and managed by HMRC!  They have plenty of data on the relevant pages, including a calculator:

https://www.gov.uk/capital-gains-tax
https://www.gov.uk/tax-sell-shares
https://www.tax.service.gov.uk/calculate-your-capital-gains/resident/shares/disposal-date

ColdIron

You need to establish the weighted average cost per share. Put simply, add up the total cost of the purchases (including fees and stamp duty) and divide that by the number of shares. You didn't ask but it's worth noting that partial sales will not affect the cost of acquisition

kla75

ColdIron said:

You need to establish the weighted average cost per share. Put simply, add up the total cost of the purchases (including fees and stamp duty) and divide that by the number of shares. You didn't ask but it's worth noting that partial sales will not affect the cost of acquisition

Thanks a lot. Seems like the only doable calculation. But wouldn't that include shares that I didn't actually sell then, assuming I'm still going to keep some? (in my example, selling 15 out of 20)

eskbanker

kla75 said:

ColdIron said:

You need to establish the weighted average cost per share. Put simply, add up the total cost of the purchases (including fees and stamp duty) and divide that by the number of shares. You didn't ask but it's worth noting that partial sales will not affect the cost of acquisition

Thanks a lot. Seems like the only doable calculation. But wouldn't that include shares that I didn't actually sell then, assuming I'm still going to keep some? (in my example, selling 15 out of 20)

ColdIron's point is that you need to work out an average cost per share, which needs to be deducted from the proceeds of each one when selling any, so if, for example, you had 20 shares at a total cost of £2,000, your unit cost is £100, so when selling 15 you'd deduct £1,500 from the sale value to give the gain, leaving five shares still valued at £100 each.

ColdIron

I don't understand the question. When you make your first sale your cost will be: 15 * weighted average cost per share. When you make the second sale your cost will be: 5 * weighted average cost per share. Selling doesn't affect the cost of aquisition, only future purchases will alter your cost

kla75

Ok got it, that helps. Thank you all!

kla75

ColdIron said:

I don't understand the question. When you make your first sale your cost will be: 15 * weighted average cost per share. When you make the second sale your cost will be: 5 * weighted average cost per share. Selling doesn't affect the cost of aquisition, only future purchases will alter your cost

I was confused because I don't see a direct relation between purchase and sales dates. To give an example:

2018 purchased 5 shares at 5 pounds = 25

2019 purchased 5 shares at 10 pounds = 50

2020 purchased 5 shares at 20 pounds = 100
Total cost: 175

Weighted average cost p.s. =  175 / 15 = 11.6

2021 selling 10 shares at 30 pounds = 300 

Capital gain = 300 - 10x11.6 = 184

If Halifax sold my shares from 2018 and 2019 only, there would be a different calculation for capital gain

300 - (25+50) = 225

But given the responses here, I assume the first calculation is correct? 

ColdIron

kla75 said:

But given the responses here, I assume the first calculation is correct? 

Yes the first is correct. You don't get to choose which shares you sell. In the main they are treated as a single pooled asset with one share being indistinguishable to another (There are separate matching rules for shares reacquired on the same day and within 30 days of sale that do not apply here). Lookup Section104 holdings if you are interested