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I bought my holding in a unit trust at 2 different prices on

Customer Question

I bought my holding in a unit trust at 2 different prices on 2 different dates. I am now selling part of the total holding and am wondering if I understand the CGT implications correctly.

I have a feeling that I look at the second purchase first and only if I sell more than the whole of the second purchase do I start calculating on the first purchase, but I am wondering if this is correct?

Grateful for your advice.
Gordon Myers
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello Gordon, I'm Keith and happy to help you with your question.

Here is the general rule on share CGT calculations. You will see that you are slightly out of date, only by 6 years! Now you bulk the total costs together irrespective of the purchase date to arrive at the buying price for your computation.

Prior to April 2008, where the same unit trust shares had been bought at different times, the CGT calculations were based on the ‘last in, first out’ principle and each tranche being sold was treated as a separate asset.

Since 2008, the calculation has changed. Identical holdings in an investment that have been bought at different times are now treated as a single asset, known as a Section 104 holding, and when the holding is sold, the aggregate purchase price is used to calculate any gains or losses.

http://www2.skandia.co.uk/Adviser/KnowledgeDirect/Tax--Trusts/Capital-Gains-Tax/Section-104-holdings--Share-Identification-Rules/#sthash.NSpJKUwW.dpuf is the relevant HMRC advice site.

I do hope I have been able to throw some light on the new system for you.
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Customer: replied 3 years ago.

Many thanks. You've save me a bit of hassle.


 


Gordon

Expert:  bigduckontax replied 3 years ago.
Happy to be of assistance, Gordon. Thank you for your support.

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