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Numpty’s guide to CGT
Comments
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VXman said:... If I take out £10K this tax year from a fund that I have added to and withdrawn from over the last 7 years how do I work out what my gains were?
Two additional notes. Beware of accumulation fund units. If you hold these outside of a tax shelter (ISA, SIPP) you pay income tax annually on the reinvested but not actually received 'notional' dividends, and you later subtract those 'notional' dividends out for capital gains tax. And, beware any 'equalisation' payments that may have come along with dividends. These are not taxable annually (return of capital) but need to be subtracted from your costs for capital gains tax. The government's example does not cover these wrinkles at all.
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eskbanker said:You have to be able to work out the unit acquisition cost, based on all previous transactions for that investment - repeatedly buying and selling within an ISA removes that obligation but if you're doing so in an unwrapped account then you're responsible for keeping records of every single transaction in order to calculate your CGT liability.
So, unit cost when purchased vs. unit cost when sold X number of units? Just got to work out when those particular units were purchased. (easier said than done)
As regard 'calculate your CGT liability' I really do think this kind of stuff should be the responsibility of the HMRC especially when they make the whole tax situation so complicated. And if I get it wrong how do they know - unless they are checking it - in which case they may as well do it themselves to begin with.0 -
VXman said:eskbanker said:You have to be able to work out the unit acquisition cost, based on all previous transactions for that investment - repeatedly buying and selling within an ISA removes that obligation but if you're doing so in an unwrapped account then you're responsible for keeping records of every single transaction in order to calculate your CGT liability.VXman said:
As regard 'calculate your CGT liability' I really do think this kind of stuff should be the responsibility of the HMRC especially when they make the whole tax situation so complicated.
There's plenty of reading material to assist:
https://www.gov.uk/capital-gains-tax - overview
https://www.gov.uk/tax-sell-shares - investment-related guide, including a calculator
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual - much more detail....0
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