Can I count brokerage monthly fee as cost in tax return?

megatower

As titled, I am using interactive investor and they charge a monthly subscription. May I count that as the cost, since it offsets part of the transaction fee? If yes, what's the best way to split them between different taxes (e.g. capital gain/interest/dividend) if there is more than one?

dunstonh

Can I count brokerage monthly fee as cost in tax return?

no.
............

megatower

If the subscription isn't part of the cost, would it make sense to count the trading credit (ii gives a small amount of credit as part of the subscription) as the cost? 

ps : I would probably be sounded extremely tight to chase these small marginal gain :-)

ColdIron

You can use direct costs in relation to the transaction to increase the book cost or reduce the eventual sale proceeds (platform transaction cost, stamp duty etc). This is good as it reduces your potential capital gain. Maybe I am misreading you but if you deduct the credit from the trx cost surely this works against you and you would have a larger capital gain?

You should use the costs detailed on the contract note

megatower

No, don't think you misread. I was wondering whether to claim those transaction fee covered by credit toward the cost. I wasn't sure mainly because even thought I didn't pay for the credit directly (hence the initial thread was on whether to count the subscription fee itself).  

Sounds like you think I should be able to, which is good news.

wmb194

megatower said:

If the subscription isn't part of the cost, would it make sense to count the transaction fee credit (ii gives a small amount of credit as part of the subscription) as the cost? 

ps : I would probably be sounded extremely tight to find these small marginal gain :-)

Nope. The cost has to directly relate to the transaction. What you see on the contract note is what you can allow.

The cost needs to "wholly and exclusively" relate to the acquisition or disposal of the asset. The credit in question is related to an account fee that you'd have to pay whether or not you made the trade.

https://merrantiaccounting.com/what-counts-as-allowable-expenditure-for-capital-gains-tax-relief/#:~:text=1.,sold%20and%20therefore%20not%20allowable.

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg15250

ColdIron

megatower said:

Sounds like you think I should be able to, which is good news.

That's not what I think at all. I doubt the credit appears on the contract note and it isn't directly related to the transaction. What I am asking is why, even if were possible, you would do it if it resulted in a higher potential tax bill?

What is it that you think is advantageous to you?

megatower

ColdIron said:

megatower said:

Sounds like you think I should be able to, which is good news.

That's not what I think at all. I doubt the credit appears on the contract note and it isn't directly related to the transaction. What I am asking is why, even if were possible, you would do it if it resulted in a higher potential tax bill?

What is it that you think is advantageous to you?

I was replying to wmb194, but seems that I misunderstood him. 

I just double check an ii transaction receipt, it does list trading credit directly. As an example, if there is an investment acquisition of £100 with a commission of £5, and a trading credit of £5, then ii calculates the 'Total' as 100+5-5=£100, so the cost is reduced by the trading credit. 

masonic

megatower said:

I just double check an ii transaction receipt, it does list trading credit directly. As an example, if there is an investment acquisition of £100 with a commission of £5, and a trading credit of £5, then ii calculates the 'Total' as 100+5-5=£100, so the cost is reduced by the trading credit. 

That's not a particularly helpful way of setting it out - others would just list it as a £0 cost. But I don't think the credit allows you to still claim the cost, and would not wish to argue the toss with HMRC for the sake of such a small sum.

megatower

wmb194 said:

Nope. The cost has to directly relate to the transaction. What you see on the contract note is what you can allow.

The cost needs to "wholly and exclusively" relate to the acquisition or disposal of the asset. The credit in question is related to an account fee that you'd have to pay whether or not you made the trade.

https://merrantiaccounting.com/what-counts-as-allowable-expenditure-for-capital-gains-tax-relief/#:~:text=1.,sold%20and%20therefore%20not%20allowable.

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg15250

Very useful references and CG15250 is very clear to my original question "You should not allow a deduction for subscriptions for periodicals or for publications by analysts, stockbrokers or other professional advisers, whether for public or private circulation. Other similar types of expenditure are not allowable.".

wmb194 - for the example in the message above, should I just use £100 as cost (effectively the same as there is no commission)? Thanks.

megatower

masonic said:

That's not a particularly helpful way of setting it out - others would just list it as a £0 cost. But I don't think the credit allows you to still claim the cost, and would not wish to argue the toss with HMRC for the sake of such a small sum.

Thanks - didn't see your reply when I posted another. I am now also thinking as you suggested as £0 cost.