Calculating CGT liability on an accumulation fund with contributions in different years

HamAndCheese

Hi All,

I hold an accumulating (dividends reinvested) index fund which I have purchased additional units of over the course of several years.

I am now looking to sell the holding and I am trying to work out how to calculate the CGT liabilities for this. I have declared the reinvested dividends every year as part of my self-assessment tax return.

Searching around the web hasn't yielded much for me but I may be searching for the wrong terms here.

Can anyone guide me how to calculate the liability?

[Deleted User]

If you’re selling the whole holding it’s simply a matter of sale proceeds less the cost of all of the individual purchases added together. Perhaps I am not seeing the issue? 

HamAndCheese

Thanks Ferro, but I am trying to optimise when I sell. I could spread my sales out over the coming years to make maximum use of CGT allowance. On the other hand if the amount of CGT to pay is small I might just sell it all and pay the tax this year given potential changes to the tax in the coming years.

I hope that clears up what I mean but if not say and I will have another bash at explaining!

eskbanker

Your acquisition costs are the total of not just the capital purchases but also the reinvested dividends, less the transaction costs associated with the purchases:

https://www.gov.uk/tax-sell-shares/work-out-your-gain

Divide the resulting total by the number of units you now hold, which gives the average cost per unit.

Compare that with the current unit price to give a gain per unit, from which you can work out how many units to sell in order to use up your annual exempt amount.