CGT on a long term investment

cmg452

I have an OEIC from way back which has increased substantially due to reinvestment (scrip) so, as a whole, is subject to a large amount of capital gains tax.

However, if I were to sell the more recent, automatic, investments the difference in value between acquisition and sale would presumably be much lower. Is there a way to do this and how on earth would I find out the comparative values on just a fraction of the total?

Yes I need an FA, but I want to know what I'm dealing with before I start. Also, whether I can compare the original investment of xxx shares with the same number now. In other words, the profit I have made over the years is not solely on that opening amount

wmb194

https://forums.moneysavingexpert.com/discussion/6673729/cgt-on-a-long-term-investment

No, they form a Section 104 pool and the cost is averaged between them. There are rules for same day purchase and sales and within 30 days but these don’t appear to apply.

You need to add it all up…

https://www.gov.uk/government/publications/shares-and-capital-gains-tax-hs284-self-assessment-helpsheet/hs284-shares-and-capital-gains-tax-2024

Woodstok2000

I'm not an expert, but when I have faced this scenario with my own investments I was advised I couldn't differentiate between shares in the same company/vehicle purchased at different times. The purchase price would just be an average of all the acquisition prices.

So if you buy 10 shares at £1 and then 10 shares at £10, your purchase price for cgt purposes would be £5.50 (total price of £110 divided by 20 shares).

eskbanker

I have an OEIC from way back which has increased substantially due to reinvestment (scrip) so, as a whole, is subject to a large amount of capital gains tax.

If the growth is primarily due to reinvestment of dividends then this gives rise to a lower CGT liability than if it had been actual underlying unit value growth, although the dividends would have been liable to income tax when paid - is it an income-oriented OEIC?

cmg452

Thank you all. Very interesting.

It is not income-oriented and I'm afraid I have never declared the dividends (paid in shares) as I am PAYE and naively thought the provider told HMRC. Does this mean I'm in a deeper mess than I thought?

Woodstok2000

https://forums.moneysavingexpert.com/discussion/comment/82046095#Comment_82046095

Not Necessarily. There is a dividend allowance of £500 per year, have they ever been higher than that?

silvercar

https://forums.moneysavingexpert.com/discussion/comment/82046157#Comment_82046157

and used to be much higher!

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82046095#Comment_82046095

I suspect you maybe, depending on whether this accumulation goes back decades and the reportable dividends thereon have been increasing over that period.

What is the current approximate value of the OEIC , compared to the accumulated value of the annual dividends and your original capital purchase cost?

You probably have some substantial tax year spreadsheets to prepare, documenting the reportable annual income, but on the positive side those sames dividends will have been increasing your cumulative book cost for CGT purposes.