Share save and CGT

Anything_123 wrote: »

Thank you again. The £18k I originally invested, would that be fully offset against the £15k I sold from the investment account or would I have to split it by the correct amount that went into the ISA and investment account?

You can't just say that you somehow invested all your £18k of cash into the shares that ended up in the investment account worth £15k, and magically acquired the ISA'd shares for free.

You are right in suspecting that you have to split that £18k by the 'correct amount' for your circumstances, rather than make up a fantasy that gets you a better result

What happened was, you spent £18k buying X number of shares in total, and you had transferred a/Xths of those shares into the ISA while putting b/Xths of them into the investment account. So the base cost of all the shares you put into the investment amount when acquired from your sharesave is b/X multiplied by £18000.

The reason I ask is because I also sold some CSOPs and if I can apply the CGT allowance to the investment account and CSOPs I won’t have to pay CGT but if I need to split the original investment into the ISA aswell I will be subject to tax. I hope that makes sense

Are the shares acquired under the CSOP the same type of shares in the same company as you had acquired through the sharesave? If so, you will have to treat them as part of one big pool with the shares in your investment account which you acquired through the sharesave.

For example:
Through your sharesave you spend £18000 buying 9000 shares at £2 each. You put 5500 of these shares into the ISA (which you can now ignore any tax on forever) and leave 3500 shares into the normal unwrapped investment account.

So the shares in the unwrapped investment account had a cost of £7000 ; being 3500 shares at £2 each, or 3500/9000ths of the £18000 cost.

Then through a different plan you exercise an option to buy 14000 more shares in the company for a pound each (£14000). But now you have them, they're all the same type of share as the ones you bought through the sharesave (e.g. ABC Company plc 0.1p ordinary shares). So you have a total pool of unwrapped shares containing (3500+14000) = 17500 shares and that pool of shares cost (£7000 + £14000) = £21000. It's clear from this that the unwrapped shares you hold have a base cost of £21000 /17500 = £1.20 each, because the cost of all the shares you hold just gets averaged.

Even if you think of them in your head as two groups of shares: if they're functionally identical shares held at the same time, HMRC will see them as one big pool which cost you -on average- £1.20 each.

So if you then sell all 3500 of the ones in your investment account which you first told us about, and a few thousand of the ones you bought in the other plan, each of those shares sold has a cost of £1.20.

The way to avoid such "cross contamination" of the costs of all the shares being averaged together in one big pool, is to not hold any of them at overlapping times. So if you disposed of all the CSOP ones before you even bought the sharesave ones, and don't have any CSOP-acquired shares left and nothing overlapped, they're an irrelevance. And obviously if the CSOP shares are a different company to the sharesave, the info above is irrelevant