iWeb Tax Certificate

valiant24

I'm doing our tax return for the year ended 5th April 2024.

The tax certificate from AJ Bell shows me the capital gain on disposals I have made from my dealing account throughout the year, but the iWeb tax certificate does not, even though I did make several such disposals.

Is this usual would anyone know?  It's going to be painful to work it out myself.

Thanks
V

masonic

It is impossible for any broker to provide reliable figures for disposals because they are not in possession of all of the information required. They cannot know whether or not a sale can be matched to an acquisition on another platform under bed and breakfast rules for example. They would also be unable to provide a reliable base cost because they will be unaware of holdings purchased elsewhere.

Therefore iWeb is sensible not to provide figures that could be incorrect.

Given you are trading holdings at AJ Bell and iWeb, perhaps others, you really need to keep your own records covering all your trades across all platforms in order to calculate CGT figures accurately and avoid making a false declaration to HMRC.

valiant24

masonic said:

It is impossible for any broker to provide reliable figures for disposals because they are not in possession of all of the information required. They cannot know whether or not a sale can be matched to an acquisition on another platform under bed and breakfast rules for example. They would also be unable to provide a reliable base cost because they will be unaware of holdings purchased elsewhere.

Therefore iWeb is sensible not to provide figures that could be incorrect.

Given you are trading holdings at AJ Bell and iWeb, perhaps others, you really need to keep your own records covering all your trades across all platforms in order to calculate CGT figures accurately and avoid making a false declaration to HMRC.

Thanks for the comprehensive reply.

I take your point that there are some circumstances in which a platform would not have all the necessary facts - if you'd transferred in from another platform for example (I haven't) - but in general the rules on matching disposals to acquisitions via average price are quite clear, and just such a calculation appears on my AJ Bell tax cert this year. 

Perhaps what you're saying is if, say, I had bought 200 then 300 of VWRP on AJ Bell at different prices, then sold all 500, AJ Bell would provide me with a capital gain figure based on those purchases; but if I had also purchased 250 on iWeb but not yet sold them, these should really be factored into the calculation?

Anyway iWeb told me that they didn't provide CGT figures because they're execution-only; AJ Bell said I could rely on theirs because they're carefully checked.

I might consolidate my two dealing accounts for simplicity.

EthicsGradient

valiant24 said:

masonic said:

It is impossible for any broker to provide reliable figures for disposals because they are not in possession of all of the information required. They cannot know whether or not a sale can be matched to an acquisition on another platform under bed and breakfast rules for example. They would also be unable to provide a reliable base cost because they will be unaware of holdings purchased elsewhere.

Therefore iWeb is sensible not to provide figures that could be incorrect.

Given you are trading holdings at AJ Bell and iWeb, perhaps others, you really need to keep your own records covering all your trades across all platforms in order to calculate CGT figures accurately and avoid making a false declaration to HMRC.

Thanks for the comprehensive reply.

I take your point that there are some circumstances in which a platform would not have all the necessary facts - if you'd transferred in from another platform for example (I haven't) - but in general the rules on matching disposals to acquisitions via average price are quite clear, and just such a calculation appears on my AJ Bell tax cert this year. 

Perhaps what you're saying is if, say, I had bought 200 then 300 of VWRP on AJ Bell at different prices, then sold all 500, AJ Bell would provide me with a capital gain figure based on those purchases; but if I had also purchased 250 on iWeb but not yet sold them, these should really be factored into the calculation?

Anyway iWeb told me that they didn't provide CGT figures because they're execution-only; AJ Bell said I could rely on theirs because they're carefully checked.

I might consolidate my two dealing accounts for simplicity.

Do AJ Bell's figures include the Excess Reportable Income for VWRP? There was some, applied on 31st Dec 2023 (and even a small amount for the Income version - VWRL). It's another complication which execution-only brokers can say isn't their area.

ColdIron

I wouldn't rely on their figures, there are many cases where they may not be able to do it properly as above. You are responsible for your tax figures and not them

You might calculate one or two of the easy cases yourself to see if it exactly tallies with their figure. Do they simply report the difference between No of shares * share price for the acquisition and sale or do they account for transaction fees and stamp duty where it applies to correctly reduce your gains? How about corporate actions? Retained dividends on non-distributing securities?

Obviously they cannot report ERI

masonic

valiant24 said:

masonic said:

It is impossible for any broker to provide reliable figures for disposals because they are not in possession of all of the information required. They cannot know whether or not a sale can be matched to an acquisition on another platform under bed and breakfast rules for example. They would also be unable to provide a reliable base cost because they will be unaware of holdings purchased elsewhere.

Therefore iWeb is sensible not to provide figures that could be incorrect.

Given you are trading holdings at AJ Bell and iWeb, perhaps others, you really need to keep your own records covering all your trades across all platforms in order to calculate CGT figures accurately and avoid making a false declaration to HMRC.

Thanks for the comprehensive reply.

I take your point that there are some circumstances in which a platform would not have all the necessary facts - if you'd transferred in from another platform for example (I haven't) - but in general the rules on matching disposals to acquisitions via average price are quite clear, and just such a calculation appears on my AJ Bell tax cert this year. 

Perhaps what you're saying is if, say, I had bought 200 then 300 of VWRP on AJ Bell at different prices, then sold all 500, AJ Bell would provide me with a capital gain figure based on those purchases; but if I had also purchased 250 on iWeb but not yet sold them, these should really be factored into the calculation?

Anyway iWeb told me that they didn't provide CGT figures because they're execution-only; AJ Bell said I could rely on theirs because they're carefully checked.

I might consolidate my two dealing accounts for simplicity.

Precisely the bit in bold. You might have a large holding of VWRP bought around 2020 at an average price of 60p not known to AJ Bell. If you bought a few shares at AJ Bell at a price of 90p at the end of last year and sold them at a price of 100p, then AJ Bell's "carefully checked" figures would use a cost base of 90p, whereas the value you must use is a little over 60p (the average acquisition price of the whole pool), so the calculation from AJ Bell will be completely wrong. What then if you bought them back at iWeb within 30 days, the acquisition would be matched to the previous sale and you would be treated as not having made a disposal. So again AJ Bell's figures would be completely wrong.

AJ Bell ought to know this. I doubt they would be willing to be held liable for you underreporting the gain to HMRC.

valiant24

EthicsGradient said:

Do AJ Bell's figures include the Excess Reportable Income for VWRP? There was some, applied on 31st Dec 2023 (and even a small amount for the Income version - VWRL). It's another complication which execution-only brokers can say isn't their area.

They produce a separate report on it; see attached.

valiant24

I wrote to Fundsmith asking why they can't provide the info, and learned something valuable that you probably all already know:

When calculating the capital gain on accumulation shares you have to bear in mind that any declared dividends were not paid to you, instead they got added to the share price (thereby increasing it).

 Although the dividend is not received as income by accumulation shareholders, it would/should have been declared as income in the relevant tax years.  In turn, this means that when it comes to calculating capital gains, part of the share price will be made up of accumulated dividends that have already been taxed as income.  Given it has already been taxed, you would deduct from the share price an amount equal to the pro rata accumulated dividends.  

Every Day is School Day!

EthicsGradient

valiant24 said:

I wrote to Fundsmith asking why they can't provide the info, and learned something valuable that you probably all already know:

When calculating the capital gain on accumulation shares you have to bear in mind that any declared dividends were not paid to you, instead they got added to the share price (thereby increasing it).

 Although the dividend is not received as income by accumulation shareholders, it would/should have been declared as income in the relevant tax years.  In turn, this means that when it comes to calculating capital gains, part of the share price will be made up of accumulated dividends that have already been taxed as income.  Given it has already been taxed, you would deduct from the share price an amount equal to the pro rata accumulated dividends.  

Every Day is School Day!

And that should appear in AJ Bell's calculation of your capital gains for what you sold (not just in a separate sheet). If it doesn't, then they're making a calculation based on incomplete data - and, even if you've only ever held that ETF/accumulation unit at AJ Bell, you'd need to redo the calculation yourself.