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  • Capital Gains SA108 CGN11 Computation Working Sheet

    Hello With reference to exchange listed shares when providing the list of disposals and relevant calculations required to complete Capital Gains Tax Summary form SA108 ( page CG2 Boxes 23-28 and 31-36) is it sufficient to provide for each share sold the Allowable Cost ( i.e. worksheet Total Cost box G=D+E) and Net Disposal Proceeds (i.e. worksheet Net Disposal Proceeds box C=A-B) without providing the split between box D Purchase Cost & box E Incidental cost of acquisition and the split between box A Sales Proceeds & B Incidental costs of sale? I have sold about 110 shares on a UK retail online share dealing platform that when downloading the various transactions only provides share transaction description, quantity, direction (bought or sold) and final amount (i.e. total cost paid or net sales amount received). In order to provide the breakdown between execution amount (boxes A & D) and incidental costs (boxes B &E) such as commission, stamp duty tax, PTM levy, etc I would need to manually write down all this information from each individual contract for the about 110 disposals. Is this necessary? The end result will be the same as the final cost/proceeds amounts provided in the platform's downloaded csv file. Thank you. Regards Edward
  • RE: Cryptocurrency: 2 SA related queries

    Hi again, Having reread SA108 Capital Gains Tax summary notes and form, as well as some relevant sections in HMRC's capital gains manual, I think I should report capital gains & losses deriving from the sale of cryptoassets in the "Other property, assets and gains" section (SA108 CG1 Boxes 14 to 22). In SA108 capital gains can be reported in four different sections : 1. Residential property (and carried interest); 2. Other property, assets and gains; 3. Listed shares and securities; 4. Unlisted shares and securities. I think that as cryptoassets are neither residential property, nor shares and securities (whether listed or not) they are "assets not covered elsewhere" in SA108 whose capital gains or losses - according to the notes (SA108 CGN 5) - should be included in the "Other property, assets and gains" section. Am I correct? Thank you. Regards Edward
  • RE: Cryptocurrency: 2 SA related queries

    Hi, Thank you for your reply. Could you clarify further your answer to #1 please? Coinbase and Gemini are two cryptocurrency exchanges where Coinbase is a public company listed on Nasdaq while Gemini as a private company is not listed. Bitcoin, Ethereum and other cryptocurrencies, coins and tokens trade on many different exchanges as they are unregulated decentralised digital assets that exist on the blockchain. In HMRC's authorised exchanges section I could not find reference to any cryptocurrency exchange. Similarly, in HMRC's cryptocurrency manual capital capital gains section I found no indication with regards to which section in SA108 they should be included. I understand that the "Listed shares & securities" section of Capital Gains Summary (SA108 Boxes 23 to 30) and "Unlisted shares & securities" section (SA108 Boxes 31 to 38) cover shares, bonds, funds and regulated securities the on differentiator being whether the exchange is an authorised exchange according to HMRC. The notes include cryptoassets in the list of assets to report for capital gains purposes but do not indicate in which section they should be reported. Should I report capital gains & losses for the cryptoassets I bought and sold in the Unlisted section of SA108 i.e. in Boxes 31 to 38 of SA108? If not, where? Thank you. Regards Edward
  • Cryptocurrency: 2 SA related queries

    Hi, #1 On two cryptocurrency exchanges, Coinbase and Gemini, I invested in some cryptocurrencies & tokens which I have subsequently sold resulting in capital gains and losses that I will need to declare. In the SA108 Capital Gains Tax Summary pages should I declare these transactions in the "Listed" or the "Unlisted" section? #2 For reading some introductory information material about a few cryptocurrencies I was rewarded at zero cost with a few tokens worth in total about £22 at the time. Should this one-off amount be included in the SA100 tax return? If so, as it is not income nor interest, where in particular should this amount be included please? Thank you. Regards Edward
  • Return of Capital and Consolidation query

    Hello, As a UK retail investor in my UK share portfolio I own shares in a FTSE100 UK company that having disposed of some non-core businesses wants to pay this year its shareholders some of the proceeds by a one-off payment proposed to take place by way of a return of capital. The company also plans to consolidate i.e. reduce the number of shares each shareholder owns. In financial terms the return of capital and consolidation in theory should be neutral with regards to value, i.e. the value of the "new" shares held plus the return of capital amount should equal the value of the old shares just prior to the corporate action. Assuming that the return of capital distributed is more than 5% of the value of the shares and also greater than £3,000, (a) will this one-off payment by the company reduce my cost basis on future disposal (I plan to hold the shares for many years) in terms of calculating the capital gains to declare or (b) will it give rise to a gain to be included in the self-assessment capital gains pages (SA108) for tax year 2022/23? In case (b) is the answer, where can I find a worksheet example of how to declare for capital gains purposes such a return of capital distribution please? Thank you. Best regards 
  • RE: Fixed Income Investment Trusts and Closed-ended investment companies

    Hello, Some of the investment trusts and closed-ended investment companies I referred to in their dividend declarations designate dividend amounts (usually whole) as interest distributions for UK tax purposes. One offshore company is a UK reporting fund that confirms that "the fund consists of more than 60% of bonds ... is considered a Bond Fund under the Reporting Fund regime". For those companies it seems clear to me that I should declare the distributions as interest in SA100 TR3 Box 2 or SA106 F2 Box B as appropriate. In the SA106 Foreign Notes on page FN 7 in the "Dividends from foreign companies section" it states "There are specific rules about dividends from offshore funds. If the fund has more than 60% invested in interest bearing assets, any distribution that you receive, or that is reported to you is treated as interest received. You need to put this under ‘Interest and other income from overseas savings’." Could you kindly explain when this rule is applied? One of my investments is with a UK reporting offshore fund that pays regular distributions declared as dividends (not designated as interest) but the fund has more than 90% invested in interest bearing assets. Other two Jersey companies listed on LSE have typically 94%+ and 82%-84% respectively invested in interest bearing assets and pay regular distributions declared as dividends (not designated as interest). As a retail client I am not directly in contact with these companies: I invest on a diversified basis via large UK retail brokerage platforms that in their annual consolidated tax certificate confirm the distributions as dividends. I am simply double-checking because this rule in SA106 seems a clear instruction to put the distributions under "interest and other income from overseas savings". I would be grateful if you clarify the applicability of this rule, which seems to be a catch-all rule to specifically cover the situation when a company declares a dividend, without designating it as interest despite investing mainly in interest bearing instruments. Thank you. Regards 
  • Fixed Income Investment Trusts and Closed-ended investment companies

    Hello, Are distributions from Fixed Income Investment Trusts and Closed-ended investment companies to be treated as dividend or interest distributions? I own shares in some Fixed Income investment trusts (GBR domicile) and closed-ended investment companies (GGY & JEY domicile) bought on LSE Main via online UK retail broker platforms. Their portfolios are invested in debt related securities, loans, credit i.e. fixed income. They are classified by Trustnet as Asset Class Fixed Interest and by AIC as IT Debt. There’s one that is qualified as Mixed Assets, but more than 60% is typically invested in fixed income related securities. One of the funds is even a UK reporting fund that qualifies as a Bond Fund. They all pay regular income distributions which brokers in their Consolidated Tax Certificates define as dividends. Instead it seems to me that they should all be treated as equivalent to Bond funds. I think in my self assessment tax return I should declare their various distributions as interest, i.e. included them in “SA106 F2 Box B interest from overseas” for the GGY & JEY domiciled closed-ended funds and in “SA100 TR3 Box 2 Untaxed UK Interest” for the UK ITs. Is it correct for me to do so? Thank you. Regards Edward
  • Share disposal order

    Hi, I sold shares in a UK investment trust a small amount (~1.1%) of which according to "HS284 Shares & CGT (2021)" are identified against shares purchased under the "bed & breakfasting" rule as I purchased them less than 30 days following the day of disposal, while the rest are identified against shares in the Section 104 Holding cost. I think that for SA108 CGT purposes I should still treat it as 1 listed disposal. Is this correct or should I report it as 2 separate disposals? Thank you. Regards, 
  • RE: Equalisation clarification

    Hello, thank you for the explanation and related links to my queries relating to UK AUTs/OEICs. I understand now that fund distributions (dividend/interest) to declare as investment income in the first allocation period are Dividend Group II distributions (equal to th efull dividend due to Dividend Group I minus equalisation) and full period dividend Group I for the following distribution periods. Once sold in calculating the capital gain/loss the allowable cost is reduced by the equalisation amount. In HS284 Shares and Capital Gains Tax (2021) that you suggested for further information, there is a section on "Accumulation units" which states that "If you hold accumulation units you will not receive distributions of income from the trust. Instead, the income is retained and reinvested automatically for you (a ‘notional distribution’). You do not receive any new units, but the value of your existing units is increased. If you receive notional distributions which are subject to Income Tax, you’re allowed the amount of these distributions as additional expenditure on your accumulation units" this seems to indicate that the allowable cost instead of being reduce by the equalisation amount is increased. Could you kindly clarify this point for me? Thank you. Regards
  • RE: Equalisation clarification

    Hello, Having thought further about equalisation vis-a-vis UK authorised unit trust/OEIC shares in terms of dividend/interest distributions and capital gains/losses to declare in the SA tax return, irrespective of whether the shares are Accumulation or Income/Distribution class, as equalisation is a return of capital I should deduct it from the first distribution allocation following purchase to declare and also deduct it from the Section 104 Holding allowable cost used in calculating CGL on disposal. In a nutshell I think that it reduces the taxable dividend/interest amount in the first distribution period and increases by the same amount the taxable capital gain / reduces the declarable capital loss as appropriate. So for example: if I invest £1000 in an Equity type UK Auth. UT/OEIC with quarterly dividend distributions (Accumulation or Income Distribution either class), - at the end of the first quarter it pays (Acc or Inc) £5 dividend and declares £1.5 equalisation, - at the end of the second quarter it pays £4.25 dividend, - after which I sell my investment for £1010. In such a case in my tax return in this hypothetical explanatory case - at SA 100 TR3 Box 5 I would declare £7.75 dividend received (£5 -£1.5+£4.25) and - on SA108 I would declare a capital gain of £11.5 [£1010-(£1000-£1.5)]. Please let me know if this is the correct approach to apply equalisation amounts with regards to declarable distributions and capital gains / losses or if I should alter my approach with reference to my UK authorised unit trust/OEICs Accumulation shares and Income distribution shares as explained in my initial post. Thank you. Best regards Edward