Average Share Price - Dealing Costs / Monthly subs!

ChilliBob

Yep, in that test I had done. I read up on that last night, even the HMRC manual, and yes, essentially subtract the equalization costs from the total pool cost. Which, as you say, increases the gain by virtue of reducing the average cost (very slightly).

I'll be under the threshold this year, predicted to be about 4.6k of so (selling an OEIC), so I didn't worry too much about the trading costs side of things, but I do need to make sure I get that correct in my head. That's where the contract notes were useful, you could see which were in effect free, and which were paid, and indeed how much you paid - sometimes the full 3.99 other times 3.96 or something, due to there being some random pennies of trading credit left over.

Thanks 

ColdIron

dales1 said:

Also, moving forward from this disposal, you need to be able to calculate the pool of purchase costs, and the average of purchase costs, to work out the gain on *future* disposals. This is going to give rise to more head-scratching, unless you stick to the HMRC method. (The Pool needs to be reduced by the allowable costs of disposals).

Disposals don't alter your weighted average cost per share, only the number of shares. You can continue to use it until you make another purchase

ChilliBob

Thanks Cold Iron, that's useful info. It's my core holding, so I suspect I will top it up again, (obviously not before 31 days!)...

I suspect once I get this all straight in my head a d I make purchases and disposals in the same tax year I'll get some decent kind of template going for it. 

My plan was basically to only sell from one fund for at least a few years, then perhaps switch to another for axfe years etc. 

dales1

Disposals don't alter your weighted average cost per share, only the number of shares. You can continue to use it until you make another purchase

Yes you can keep using the weighted average ... until it changes eg by another purchase or by XSRI.

But my point is that you do need to keep track of the pool of purchase costs on an ongoing basis, which Chilli's method didn't seem to do.

ChilliBob

Thanks, what's XSRI by the way? 

dales1

It's excess reportable income. Taxable income from offshore HMRC-approved funds (eg the big index trackers) but which hasn't been paid to investers. (Monevator runs an occasional informative article on it).

It needs including in your income tax return, but the money was wrapped up in the fund value, so it is allowable as an expense against CGT (like dealing purchase costs) and it increases your Pool of Purchase Costs.

ChilliBob

Ah right, I didn't know it by those letters. Yeah, bit of a pain that isn't it! - Which reminds me, I have to work it out on an ETF I hold with Invest Engine, £300 worth! So it's usually less than £1 - But I might just sell it and close off the account - the profit will be probably about £30, which will be within my CGT limits, and save me the grief next year! - I think I only did it for the referral cash (which tbf was £175 quid I think!)