Dealing account- capital gains

[fca2019]

I received a windfall this year, so used up all my and wife's Isa and pension allowances this tax year. Whereas usually I'd just save in an Isa.

Pls can you help with couple of Qs.

With an unsheletered account when you sell does the platform generate a capital gains report for you?

I.e. if you buy in a fund lump sum deposits 5k at different points does it record these as book cost, then if you part sell, does it work out an apportioned gain for you?

Or is it simpler just to buy a number of separate stocks and funds, if you want to cash out amounts in future?

If you buy Income funds and leave dividend in there will the platform take their fees off the cash without having auto sell units?

Am I right that can put in a ISA 2 x 20k on 6 April? You can do first day of new tax year?

Thanks

[Alaric]

With an unsheletered account when you sell does the platform generate a capital gains report for you?

Generally speaking no, as the platform will have no knowledge as to whether you hold the same fund or share elsewhere and if you part sell, you have to work out your own apportionments. For a less head scratching time in the future, keeping a your own reliable long term record of purchases and sales is likely to be necessary. Also in funds, accumulation units involve more record keeping than income units.

Regarding CGT, the simplest approach is to manage your affairs so that you are always within the annual allowance. With stocks, this can mean not allowing the gain on a single holding to become excessive, one way of achieving this being to restrict the size of a holding on initial purchase.

Different platforms will have varying operating procedures as to how they deal with dividends and fees.

[swill453]

Am I right that can put in a ISA 2 x 20k on 6 April? You can do first day of new tax year?

Yes.

Scott.

[IanTHughes]

I received a windfall this year, so used up all my and wife's Isa and pension allowances this tax year. Whereas usually I'd just save in an Isa.

Pls can you help with couple of Qs.

With an unsheletered account when you sell does the platform generate a capital gains report for you?

I.e. if you buy in a fund lump sum deposits 5k at different points does it record these as book cost, then if you part sell, does it work out an apportioned gain for you?

Or is it simpler just to buy a number of separate stocks and funds, if you want to cash out amounts in future?

If you buy Income funds and leave dividend in there will the platform take their fees off the cash without having auto sell units?

I can only answer for the one broker that I use - A J Bell - which is yes, they do produce an Annual Tax Summary for the account. The first part of this document details all Income received during the Tax Year, separated by the various types of instrument (Ordinary Shares, REITs, Investment Trusts, Overseas ...etc...) and includes a report of any amounts already deducted for Tax purposes.

The second part of this document is a summary of all asset sales together with the net monetary gains or losses, including amounts carried forward, providing a net amount, profit or loss, upon which Capital Gains Tax (CGT) must be calculated for the year in question. This is supported by the monetary details of each sale together with the purchase details relating to each sold amount.

Of course, the figures produced can only relate to the Income and Profit/Loss of the one account that the broker knows about. But, assuming it is is the only account you have, it will provide you with the details and amounts of Income and Capital Gains, that should be added to your tax return for the year in question.

Am I right that can put in a ISA 2 x 20k on 6 April? You can do first day of new tax year?

Currently, for each individual, you can add a total of £20,000 to an ISA in any one Tax Year, an amount which may be split between a Cash and a Stocks ISA. You cannot carry forward any unused amount to the following tax year.

I hope that helps


Ian

[gryffron]

If you buy Income funds and leave dividend in there will the platform take their fees off the cash without having auto sell units?

All take dealing costs from the particular account.

But for other charges, different brokers all have different rules.

Some take their fees from your trading account balance. (most common)
Some take their fees direct from a bank account DD.
Some will take ISA fees from a trading account - assuming you have both with the same broker.
Some actually give you the choice of one or more of the above.
(I don't know of any that auto-sell assets for you. Though no doubt all/most "reserve the right" to do so if you don't otherwise pay their fees.)

I'm afraid you'll have to read the Ts&Cs of your chosen broker to find out which they do.

BTW: Halifax or iWeb don't have any "platform fees" for funds. So are a great choice if you're buying UTs or OEICS.

Gryff

[Gan020]

With an unsheletered account when you sell does the platform generate a capital gains report for you?

I.e. if you buy in a fund lump sum deposits 5k at different points does it record these as book cost, then if you part sell, does it work out an apportioned gain for you?

Or is it simpler just to buy a number of separate stocks and funds, if you want to cash out amounts in future?

Thanks

If you buy shares or funds multiple times the rules are here: https://www.gov.uk/tax-sell-shares/same-company
You’ll usually need to work out the average cost of your shares and deduct this from what you got for them to work out your gain.

Example
You buy 100 shares for 80p each. The total cost is £80.
You later buy 300 shares for £1.20 each. The total cost is £360.
In total, you have 400 shares costing £440 - the average cost of each share is £1.10.
If you sell 150 shares, the cost of the shares for your tax calculations is £165 (£1.10 multiplied by 150). Deduct this from what you sold the shares for to work out your gain.

If you bought new shares of the same type in the same company within 30 days of selling your old ones, there are special rules for working out the cost to use in your tax calculations.

The 30 day rule concerns seling shares and buying them back within 30 days and matches those transactions rather than taking the cost from the average price. If you are doing this your software will not work out the CGT correctly.

[Lootman]

With an unsheletered account when you sell does the platform generate a capital gains report for you?

Generally speaking no, as the platform will have no knowledge as to whether you hold the same fund or share elsewhere and if you part sell, you have to work out your own apportionments. For a less head scratching time in the future, keeping a your own reliable long term record of purchases and sales is likely to be necessary. Also in funds, accumulation units involve more record keeping than income units.

The fact that you may have a holding in more than one taxable account does not mean that your broker cannot produce an annual statement of gains and losses. In most cases your broker will have the cost basis because either you bought it through them or you manually entered the cost basis. And it will know what corporate actions have happened which might have altered the cost basis.

There will be exceptions where the holding was transferred in or, as you note, you duplicate that position in another taxable account. In which case you'd need to make an adjustment. I make a point of never duplicating a holding so I can use my broker's data.

It would be preferable if HMRC allowed specific lot selection but at the moment they do not. Your advice to maintain a separate spreadsheet cannot be faulted. Although personally I don't bother - I use the broker data and then adjust where necessary. I figure if HMRC ever wanted to check up on me they would probably compare my data to my broker's data anyway. They never have to my knowledge.