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Need a CGT calculator that does 30 day share matching rules

Practical Issues
drb01
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Need a CGT calculator that does 30 day share matching rules

#460930

Postby drb01 » November 25th, 2021, 6:11 pm

Hi I need a CGT calculator that takes to account the 30 day share matching rules, and also calculates the Section 104 holding. There is http://www.CGTcalculator.com which is nearly perfect, except it doesn't calculate the section 104 holding at the end. Does any one know of such a calculator? I need to be able to Cut & Paste the trades in from Excel.

GrahamPlatt
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Re: Need a CGT calculator that does 30 day share matching rules

#460949

Postby GrahamPlatt » November 25th, 2021, 8:40 pm

This 30 day rule is intended to stop people using their CGT allowance by selling and then rebuying the same share in quick succession. But is it considered as if the transaction did not happen? I ask because there are situations where that might be advantageous - e.g. correcting the effect of accepting a company’s offer to repurchase, which takes you over your CGT limit, then rebuying after the event (as with e.g. NWBD recently).

Gengulphus
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Re: Need a CGT calculator that does 30 day share matching rules

#461203

Postby Gengulphus » November 26th, 2021, 3:25 pm

GrahamPlatt wrote:This 30 day rule is intended to stop people using their CGT allowance by selling and then rebuying the same share in quick succession. But is it considered as if the transaction did not happen? I ask because there are situations where that might be advantageous - e.g. correcting the effect of accepting a company’s offer to repurchase, which takes you over your CGT limit, then rebuying after the event (as with e.g. NWBD recently).

No, it is not treated as though the transaction did not happen.

If the repurchase is of exactly the same number of shares as were sold, it is instead treated as though the sale sold the repurchased shares. (Never mind the fact that you didn't own those shares at the time you sold and so couldn't have sold them - it's still treated that way.) So the sale and the repurchase realise a likely-to-be-small gain or loss and all other outstanding transactions (including in particular the original purchase(s) of the sold shares) remain on the record to have gains and losses calculated from them in the future.

If the repurchase is of more shares than were sold, apportion the repurchase into a 'genuine repurchase' of the same number of shares as were sold and an 'extra purchase' of however many more were bought. Treat the sale as selling the shares bought by the 'genuine repurchase', then deal with the 'extra purchase' in the normal way for a purchase.

If the repurchase is of fewer shares than were sold, apportion the sale into a '30-day sale' of the same number of shares as were repurchased and an 'extra sale' of the rest of the shares that were sold. Treat the '30-day sale' as selling the repurchased shares, then deal with the 'extra sale' in the normal way for a sale.

There are indeed cases where it's advantageous that the 30-day rule applies. For example, a share on which you have a large unrealised gain receives a takeover bid and its share price rises a lot more. You reckon the bid will go through and so sell, realising a huge gain - you'd prefer not to realise that big a gain all at once, but it looks inevitable... Then the takeover bid unexpectedly falls through a week or two later, the share price falls, and you can now repurchase the shares to end up having realised a more modest gain on the sale and repurchase, and owning your original holding with its large unrealised gain. Without the 30-day rule, you'd have been stuck with the huge gain...

More generally, the 30-day rule can reasonably often be used to mostly cancel out the CGT effects of a sale when it has quickly emerged that that sale was a mistake. But it's not the total cancelling-out that would result from treating the transaction as not having happened - instead, it's a case of causing the gain or loss on the transaction to be calculated on the basis of up to 30 days of share price movements, rather than on the basis of many months, years or even decades of share price movements.

Gengulphus

GrahamPlatt
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Re: Need a CGT calculator that does 30 day share matching rules

#461205

Postby GrahamPlatt » November 26th, 2021, 3:30 pm

Thanks for the clarification Gengulphus. Much appreciated.

drb01
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Re: Need a CGT calculator that does 30 day share matching rules

#461210

Postby drb01 » November 26th, 2021, 3:47 pm

Thanks, but to get back to the OP, does anyone know of a calculator (either software or a website) to calculate the CGT taking to account the 30 day rule? And to calculate the section 104 holding? It gets quite tricky if there area a number of transactions!

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Re: Need a CGT calculator that does 30 day share matching rules

#461216

Postby Lootman » November 26th, 2021, 3:54 pm

GrahamPlatt wrote:This 30 day rule is intended to stop people using their CGT allowance by selling and then rebuying the same share in quick succession.

If that were the case then it would only apply to sales that create a gain. The rule also exists to stop you harvesting tax losses, and then immediately buying them back. That is why the rule applies both to gains and losses.

Contrast that with the US approach. There is no annual CGT-free allowance in the US. So sales that lead to a loss have to wait 30 days to be repurchased, in a similar way. But sales that result in a gain can be repurchased immediately without penalty or special treatment. It is just that there would be no point in so doing.

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Re: Need a CGT calculator that does 30 day share matching rules

#461227

Postby Gengulphus » November 26th, 2021, 4:09 pm

drb01 wrote:Thanks, but to get back to the OP, does anyone know of a calculator (either software or a website) to calculate the CGT taking to account the 30 day rule? And to calculate the section 104 holding? It gets quite tricky if there area a number of transactions!

The only CGT calculator I know of besides http://www.cgtcalculator.com/ (which you have already found) is http://www.stonebanks.co.uk/

Note that I've only seen reports (by generally-satisfied users) of other people using those calculators, and very occasionally tried out a tricky case on one or both of them. I haven't used them 'in anger' myself, and don't know whether they offer the features you want. I.e. take this as something you might investigate - nothing more, and definitely not a recommendation either for or against either of them.

In case you're wondering what I do use, the answer is some 'home brew' spreadsheets - and I'm afraid I'm not making them available to others, because they rely too heavily on their user (me) knowing what they can and cannot do, what sort of special cases they need to be modified for, etc. In short, I'd have to write an extensive users' manual to make them at all safely available to others...

Gengulphus

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Re: Need a CGT calculator that does 30 day share matching rules

#461233

Postby Gengulphus » November 26th, 2021, 4:34 pm

GrahamPlatt wrote:This 30 day rule is intended to stop people using their CGT allowance by selling and then rebuying the same share in quick succession. ...

One thing I will add is that while intended to stop people doing that, and also (as Lootman says) stop them harvesting tax losses, it is very ineffective at actually stopping those behaviours. Most notably, by using accounts in sole names, a married couple can bypass the rule by 'bed-and-spousing' - one spouse sells, the other repurchases.

And I know from personal experience that tax advisers were suggesting that method of bypassing the 30-day rule and a number of other similar ones to their clients within 24 hours of the 30-day rule being introduced, and so it seems highly unlikely to me that the government and HMRC weren't fully aware beforehand that the 30-day rule was easily bypassed. So I rather suspect that the intention of introducing it wasn't so much to prevent people harvesting tax gains and losses, as to be seen taking measures against people doing that.

Gengulphus

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Re: Need a CGT calculator that does 30 day share matching rules

#461610

Postby Nocton » November 28th, 2021, 2:08 pm

I use Investor 4 from Meridian Software https://www.meridian-software.co.uk/. Well worth the cost for managing all aspect of buying, selling, CGT and divis. I've used it and its precursor for 20 years and it manages all the buying and selling for the few shares I have held for that long.

drb01
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Re: Need a CGT calculator that does 30 day share matching rules

#461806

Postby drb01 » November 29th, 2021, 12:03 pm

In case anyone is interested, I have discovered a software tool on Github which works with CSV files from accounts such as Charles Schwab, although there's not reason why you couldn't make your own CSV file. I haven't tried it yet.
https://github.com/KapJI/capital-gains-calculator

Also there is a way to get the Section 104 holding out of http://www.CGTcalculator.com. Just put in a dummy sale in a future tax year, and it will work it all out.


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