Selling Vanguard Lifestrategy - CGT/tax question

BoyJohn811

Hi all and Happy New Year!

I was wondering if someone could help me; I have Vanguard Lifestrategy 60% blended fund with Vanguard in a general investment account and I am now looking into selling some/all to transfer to an ISA account. I have been regularly contributing to this account on a monthly basis for just a couple of years.

My questions:

1. It appears that all of my gains were just under 3000GBP (according to Vanguard). Am I right to assume that I need to take the given 'avg unit cost x number of units sold' to calculate the purchase price and use 'last price x number of units sold' and minus the former from the latter to see my gains? And, for as long as my gains are under 3000GBP, I do not need to worry about CGT and there will be nothing to report on this?

2. Do I get it right that Lifestrategy funds are domiciled in the UK, so I do not need to worry about the excess reportable income either?

Thank you very much.

masonic

Correct on both counts. Your gain should be calculated using the actual details for your sale from your contract note.

lindabea

I think you are right for an Income fund, but you are invested in an accumulation fund. I'm not sure if you need to make some adjustments to your gains due to dividend re-investment or any equalisation payments. Perhaps someone with more knowledge can advise further.   

masonic

lindabea said:

I think you are right for an Income fund, but you are invested in an accumulation fund. I'm not sure if you need to make some adjustments to your gains due to dividend re-investment. Perhaps someone with more knowledge can advise further.   

Yes, that's a good point, but if the gains are under £3000 before accounting for this, they'll still be under £3000 after accounting for the income. If the gain creeps over £3000, then it may be necessary to account for the income by subtracting from the raw gain (the income should be obtainable from consolidated tax certificates, though it will need to be looked up for the current year).

BoyJohn811

Thank you very much both. Just to be on the safe side, I will make sure that the gains stay way below £3000 (e.g., by selling just half) and leave the rest for the next tax year. I believe Vanguard paid dividends at the end of May 2024 and my records showed under £400 - so even if I would need to make a slight adjustment to account for this, by selling just half would still be under the allowance.

masonic

BoyJohn811 said:

I believe Vanguard paid dividends at the end of May 2024 and my records showed under £400 - so even if I would need to make a slight adjustment to account for this, by selling just half would still be under the allowance.

Just to be clear, the accumulated dividends would reduce your capital gain, not increase it (because these are taxable as income so can be deducted from the gain).