"Manual Bed & SIPP" does this work?

hallmark

Like many here (I suspect) I'm thinking about CGT for the first time. Never needed to before.

I have a GIA that contains 10K purchase each of BCOG and gold, silver, and platinum ETCs (all bought in a previous tax year)

Currently they're worth approx 10k (BCOG) 15k (Gold) 13k (Silver) & 9k (Platinum).

As these are my only investments not in an ISA/SIPP I'm currently musing the easiest way to realise a £3k capital gain this tax year

I don't actually want to change any of these investments, just realise £3k of the capital gain, so my proposal is:

Sell all the Silver ETC (for the sake of simplicity lets say it's worth exactly £13k at the time I sell)

Simultaneously use £13k of dry powder in my SIPP (I have that) to buy £13k of the same ETC

Wait 30 days then re-use the £13k cash in my GIA to repurchase the same ETC & simultaneously sell that ETC from my SIPP

I believe that realises a £3k gain and meets the rules, does that sound OK or any flaws?

Obviously the value of silver might rise or fall during the 30 days so I might end up with more or less units for my £13k but I can't control that part.

thanks for any help........

masonic

That looks ok to me. A shortcut would be to switch between two different ETCs if an equally good alternative exists (might be more relevant for gold).

EthicsGradient

It seem implied in your tactics that you don't want to hold the silver ETC long-term in your SIPP. Is that correct? Because otherwise you could just do the first part, leave it in the SIPP, and use the GIA cash for something else (which might include a SIPP contribution, if you're not at your limit).

hallmark

EthicsGradient said:

It seem implied in your tactics that you don't want to hold the silver ETC long-term in your SIPP. Is that correct? Because otherwise you could just do the first part, leave it in the SIPP, and use the GIA cash for something else (which might include a SIPP contribution, if you're not at your limit).

Yes that's correct.  I don't currently hold anything else in a GIA, just those non-dividend paying funds (so that for tax purposes the only concern is possible CGT).   I prefer to use the SIPP allowance for shares, bonds and gilts.

At some point very soon I'll be adding individual low-coupon gilts and probably individual inflation-linked gilts into a GIA (ISA and SIPP limits used up)

cheers

hallmark

masonic said:

That looks ok to me. A shortcut would be to switch between two different ETCs if an equally good alternative exists (might be more relevant for gold).

I did consider this but I get hazy on exactly what HMRC considers to be a "different enough" investment.  This might just be that I don't understand the subject well enough.......

masonic

hallmark said:

masonic said:

That looks ok to me. A shortcut would be to switch between two different ETCs if an equally good alternative exists (might be more relevant for gold).

I did consider this but I get hazy on exactly what HMRC considers to be a "different enough" investment.  This might just be that I don't understand the subject well enough.......

The ISIN code needs to be different.

hallmark

masonic said:

hallmark said:

masonic said:

That looks ok to me. A shortcut would be to switch between two different ETCs if an equally good alternative exists (might be more relevant for gold).

I did consider this but I get hazy on exactly what HMRC considers to be a "different enough" investment.  This might just be that I don't understand the subject well enough.......

The ISIN code needs to be different.

I hold iShares Physical Silver ETC SSLN

I think Invesco Physical Silver SLVP is pretty much identical so sounds as if I could just sell one & purchase the other which as you say is easier.

cheers

aroominyork

masonic said:

hallmark said:

masonic said:

That looks ok to me. A shortcut would be to switch between two different ETCs if an equally good alternative exists (might be more relevant for gold).

I did consider this but I get hazy on exactly what HMRC considers to be a "different enough" investment.  This might just be that I don't understand the subject well enough.......

The ISIN code needs to be different.

Which would mean you can switch between Acc and Inc versions of the same fund?

TheGreenFrog

aroominyork said:

masonic said:

hallmark said:

masonic said:

That looks ok to me. A shortcut would be to switch between two different ETCs if an equally good alternative exists (might be more relevant for gold).

I did consider this but I get hazy on exactly what HMRC considers to be a "different enough" investment.  This might just be that I don't understand the subject well enough.......

The ISIN code needs to be different.

Which would mean you can switch between Acc and Inc versions of the same fund?

I believe that yes that avoids being caught.  Maybe post on tax forum.

masonic

aroominyork said:

masonic said:

hallmark said:

masonic said:

That looks ok to me. A shortcut would be to switch between two different ETCs if an equally good alternative exists (might be more relevant for gold).

I did consider this but I get hazy on exactly what HMRC considers to be a "different enough" investment.  This might just be that I don't understand the subject well enough.......

The ISIN code needs to be different.

Which would mean you can switch between Acc and Inc versions of the same fund?

Not switch. It must be a sale for cash and use of cash to purchase the alternative unit class. A switch/conversion by the fund house is a reorganisation of capital and not a disposal.

GeoffTF

TheGreenFrog said:

aroominyork said:

masonic said:

hallmark said:

masonic said:

That looks ok to me. A shortcut would be to switch between two different ETCs if an equally good alternative exists (might be more relevant for gold).

I did consider this but I get hazy on exactly what HMRC considers to be a "different enough" investment.  This might just be that I don't understand the subject well enough.......

The ISIN code needs to be different.

Which would mean you can switch between Acc and Inc versions of the same fund?

I believe that yes that avoids being caught.  Maybe post on tax forum.

I read somewhere that it works if the fund manager does it for you but not if you do it yourself. Check the rules very carefully.