How do you Calculate Capital Gains Tax on a Share Portfolio?

Redlander

I understand the basic principle of CGT, but what happens if, say, you buy some shares at a different price each year, and then sell a lot of them. Do you have to remember the price you paid of each "slice" of shares?
Then, if you sell any shares, which "slices" are you deemed to have sold?
Can you rely on share trading platforms such as Interactive Investor to record how much you paid for each purchase?
What can you do if you've no idea how much you originally paid for your shares?

Redlander

Redlander said:

Can you rely on share trading platforms such as Interactive Investor to record how much you paid for each purchase?
What can you do if you've no idea how much you originally paid for your shares?

In which case, presumably HMRC has no idea how much you paid for them, so how can they know whether the amount you've declared is true?

eskbanker

You're obliged to keep records of all purchases, and each time you buy, the average cost per unit needs to be adjusted accordingly.  Any sale is deemed to be baselined from that average cost, i.e. the costs are pooled rather than being kept separate.

https://www.gov.uk/capital-gains-tax/print

Your platform will issue (and usually store) contract notes for each transaction so you should be able to reconstruct the costs from those.

HMRC won't have visibility of these so won't routinely validate calculations, but has the right to do so if an investigation is considered necessary.... 

35har1old

Redlander said:

I understand the basic principle of CGT, but what happens if, say, you buy some shares at a different price each year, and then sell a lot of them. Do you have to remember the price you paid of each "slice" of shares?
Then, if you sell any shares, which "slices" are you deemed to have sold?
Can you rely on share trading platforms such as Interactive Investor to record how much you paid for each purchase?
What can you do if you've no idea how much you originally paid for your shares?

If you can't prove what you paid for them HMRC may take them as having no purchase value and  once you have exceeded the current years allowance of £12,300 you would be taxed on the rest of the profit made
Do you hold the share certificate in paper format ?

Redlander

35har1old said:

Do you hold the share certificate in paper format ?

My investements are in a Vanguard Lifestrategy fund, not shares as such, so no paper certificates.

[Deleted User]

Hi,

your trading account should show total holding and total cost, so divide cost by holding for average unit price.

If you want to see individual trades you should find those in trading history.

DonnySaver

Redlander said:

35har1old said:

Do you hold the share certificate in paper format ?

My investements are in a Vanguard Lifestrategy fund, not shares as such, so no paper certificates.

I take it then that your Lifestrategy Fund is not contained within an ISA?

Swipe

Redlander said:

35har1old said:

Do you hold the share certificate in paper format ?

My investements are in a Vanguard Lifestrategy fund, not shares as such, so no paper certificates.

If you are using the Vanguard platform for your LS100 it will show you the average cost per unit. Other brokers maybe don't.

jimjames

DonnySaver said:

Redlander said:

35har1old said:

Do you hold the share certificate in paper format ?

My investements are in a Vanguard Lifestrategy fund, not shares as such, so no paper certificates.

I take it then that your Lifestrategy Fund is not contained within an ISA?

Good question. It's definitely worth using the ISA wrapper not just for the tax saving but also the reduced admin for keeping records of buying and selling.

Band7

Put the lot into an S&S ISA and/or a SIPP. and you have no tax liability and no worries about keeping records over and beyond what you can easily get from your platform

GeoffTF

Redlander said:

35har1old said:

Do you hold the share certificate in paper format ?

My investements are in a Vanguard Lifestrategy fund, not shares as such, so no paper certificates.

You should have a pdf for the contract note. You will need to account for equalisation:

https://techzone.abrdn.com/anon/public/investment/Guide-Taxation-of-Collectives

You will also need to keep your consolidated tax certificates.