ii trade credits on share-dealing for Capital Gains Tax

haveabreak

Hello all

Could you please advise on how to account for ii trade credits on share-dealings for self-assessment (capital gains tax section). As an example, I have attached two sell trades:



Both trades identical except one has dealing fee paid for by way of a trade credit. Trade credits are earned by paying the monthly broker platform charge of £9.99pm.

Obviously on Trade 2 I benefit from deducting the dealing fee and end up with a lower net chargeable gain of £500.00. On Trade 1 I am unclear how to do this because the contract note includes the Trade Credit so the net chargeable gain is £507.99.

Given that I paid for the trade credit via the £9.99 per month platform charge, can I account for the £7.99 proportion of it as expense elsewhere in capital gains self-assessment?

My understanding is platform fees (i.e. full £9.99pm) cannot be included as expense in self assessment but it would be helpful if you could clarify?

Many thanks.

Jeremy535897

I would talk to the broker/dealer you use, because the logical conclusion is that the trade credit negates the dealing fee, so you cannot deduct the dealing fee, but you get no deduction for the monthly platform charge (because it doesn't relate to a specific trade).

haveabreak

I don't think the broker will give tax advice tbh.

Jeremy535897

haveabreak said:

I don't think the broker will give tax advice tbh.

I would point out that they are selling the benefit of paying a monthly platform fee to gain trading credits, and it would be a bit odd if they didn't understand the tax consequences, which are generic for all individuals.

haveabreak

reply from ii "In terms of tax implications, we would not be able to provide any guidance as we are an execution only broker. If you are unsure of the potential tax implications of your trading, we would advise seeking independent financial advice"

Jeremy535897

I find it disappointing that they would sell a product that they don't understand the tax treatment of. I fear that the correct analysis is as I said, although you need to read the detailed terms. If you pay a non-deductible monthly fee for a service, and as a result a deductible fee is cancelled, it seems to me that you swap a deductible expense for a deductible one.