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Ask Your Own Question, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 5113
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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How is capital gains tax calculated when dealing with shares

Customer Question

How is capital gains tax calculated when dealing with shares when say 10000 are bought at £1 and then two years later a further 10000 bought at £2 and now they are worth £4. I now wish to sell say 5,000.
Is the gain based on the gain made on the 5000 bought from the first tranche of 10000 at £1.??
Many thanks

Submitted: 4 years ago.
Category: Tax
Expert: replied 4 years ago.
Hello and welcome to the site. Thank you for your question.

If you buy shares of the same class then they are aggregated
So your holding before the sale is (10000+10000) 20,000 shares at a total cost of (10,000+20000) £30,000 giving you a unit price of (30,000/20,000) £1.50 per share - called Sec 104 Holding.

Your gain will be based on average buying price of £1.50 and not £1.00 per share

Confirmation of this can be found here

I hope this is helpful and answers your question.

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