Selling shares within allowance

Numbersup

I wonder please if anyone would be so kind as to see if Im on the right road here ? .  Aim is to sell  shares without going over the CGT allowance -- so far using formula seen on here, Ive worked out my average purchase price per share  – if Ive done it in the right way?  (not asking anyone to do all the maths for me,  just to query or ok my method  and perhaps help me move on to the next step 

 

7/3/14       Bought  SMT  plc ord  25p       471   shares  @1,055.000p    total cost     £4969.05

16/2/16     Bought  SMT plc  ord 5p      2158 shares  @ 230.600p  total cost   £5001.23

22/3/19     Bought   SMT plc  ord  5p      983  shares   @ 506.000p   total cost   £4998.85

 

 13/7/20     Sold     SMT  PLC  ord  5p        2667.00    @937.6465p getting   £25,007.003

                     ( £24,994.08  after costs)      (and paid   £180 CGT)

 

SM  1st buy   ---  £ 4969.05 ÷ 471 shares   = £10.55  average

SM 2nd buy......  £5001.23 +£4969.05   ie £9970.28  divided by new total of shares   

                        ( sh 471+2158 =   2629)   so average share cost  is  £9970.28 ÷2629 = £3.79

SM3rd buy......£4998.85 + £9970.28  ie £14969.13  so avg cost is £14969.13÷by total shares

                        (2629+983) =3612   so avg share cost is £14969.13÷ 3612  =£4.14

Across all SMT purchases  the average share price is £10.55 +£3.79+£4.14   ÷ 3  =£6.16

Todays price  £8.40

Thats where Im a bit lost now --- not sure  how/where the figures for completed  sale and CGT already  paid fit into the calculation  ? Can someone explain to me what my next steps are please to achieve my goal.   

 

(PS  My preference is to only sell off some  SMT  shares  (unless  a good reason not to ). I don’t think it makes any difference to anything but just  incase as profit is an overall thing,    on 6/10/20  I  bought  Impax  IEM ord 10p      1,923.000  @ 366.7074    total cost  £7098.99)

Hoenir

Let's simplify.  This is your average purchase cost

so avg share cost is £14969.13÷ 3612  =  £4.14


You then sold 

Sold       2667    for  £24,994.08  

Your gain was 

Cost of shares sold  2667 * £4.14 = £11041.38

Net gain  £24,994.08  - £11041.38 =   £13,952.70p 

Only £180 CGT paid ????????????

You now have

945 shares at a cost price of £4.14p 

Excluding trading costs. At a selling price of £8.40p . You've a gain of £4.26p a share. That's £4,026. 

With an allowance of £6k. You can sell all the shares and incur no CGT liability

Please check that I've read your post correctly ! As you appear to have made a serious underdeclaration previously. 

ColdIron

You had 3,612 shares that cost you £14,969.13 so the weighted average share price is £4.14

You don't need to (and mathematically can't) just add the averages again and divide by 3, you already have the figure that you need: £4.14

Bear in mind that sales do not alter your cost of acquisition, just the number of shares. That weighted average share price, £4.14, can be used repeatedly until you buy again

Numbersup

Thank you .  The  CGT was definitely what I paid  -  Accountant  did the work for that calculation  , II couldnt face it  at that time.  Maybe it made a difference that it was in trust   for a grandchild?  So presumably now , all I need to do is multiply the current number of shares left  by  £4.14   and then deduct the original  3 purchase from it  Oh and then is there a formula for  finding how much to sell without going over allowance please?  Just noticed I missed seeing  most of your post sorry .Thats worrying,  will re read and yes  will   check amounts again.  

Hoenir

Numbersup said:

  Accountant  did the work for that calculation  

Suggest you contact them urgently. 

Numbersup

Hoenir . I will be seeing him soon  thanks .  In the meanwhile  thankyou I should be fine then selling just  9k's worth   to  put into cash isa   instead ,although  SMT has started to go back up nicely  .It  may be needed in c3yrs  though so  reducing risks a bit .
  
 Looking at workings out ,   "Disposal of  (2,665 shares from  s.104 holding.     Proceeds  2,665/2,665x 24,994.08)  = £24,994.08 .   Actual cost £14,993.98 x2,665/ 3,612  = 11,062.83    Subtract =  £13,931.25 Gain.
Tax calculation  . Gains £13,931  less annual exemption  of   £12,300  = £1631 charged at 10%=  £163.10 "
 
(I must have been looking at wrong entry on same day in my paying out book when I said £180 ) I did look at it briefly at the time  and although I couldnt understand how he got the actual cost down to £11,062  it seemed roughly right . Does it look any less worrying laid out like this ?   

Vortigern

Numbersup said:

...is there a formula for  finding how much to sell without going over allowance please? 

Sale price per share minus average cost per share = gain per share

Remaining CGT allowance divided by gain per share = Number of shares to sell within allowance

wmb194

Hoenir said:

Numbersup said:

  Accountant  did the work for that calculation  

Suggest you contact them urgently. 

The CGT allowance in 20/21 was £12,300 and CGT was only 10% for basic rate taxpayers so £180 on a £13,952 gain could be correct.

https://www.rossmartin.co.uk/capital-gains-tax/110-capital-gains-tax-rates-a-allowances

Hoenir

wmb194 said:

Hoenir said:

Numbersup said:

  Accountant  did the work for that calculation  

Suggest you contact them urgently. 

The CGT allowance in 20/21 was £12,300 and CGT was only 10% for basic rate taxpayers so £180 on a £13,952 gain could be correct.

https://www.rossmartin.co.uk/capital-gains-tax/110-capital-gains-tax-rates-a-allowances

Ah forgot that. Thanks. Wasn't looking at the dates! 

woodman2

I have just noticed this post, and it has rung some alarm bells with me.
I have, for a number of years done the calculation to stay within the CGT allowance, but I have done it using a strict FIFO basis. 
I purchased the shares over a number of years and have been transferring them into an ISA wrapper (in the same fund) at a rate of £20K per year.
The recent fall in CGT allowance has caused the gain I have calculated to exceed the allowance and so I have reduced the transfer below £20K to stay within the allowance.

I suppose I have two questions
1. Is the FIFO method of calculating the gain correct or should I use average?
2. Is a transfer to an ISA within the same fund considered a sale of the assets for CGT purposes?

InvesterJones

woodman2 said:

I suppose I have two questions
1. Is the FIFO method of calculating the gain correct or should I use average?
2. Is a transfer to an ISA within the same fund considered a sale of the assets for CGT purposes?

1. Not correct. Average purchase price (minus equalisation)

2. Yes.