Help Manual Home Page

Media Centre

This is the TimeToTrade help wiki. Use the TimeToTrade Trigger Trading Technology™ to execute your trades when Price, Candle Stick, Trend Line, Volume and Technical Analysis chart conditions are met - no coding required. Trade directly in the world’s global markets. Backtest your Trading Strategies. Calculate your UK HMRC Capital Gains Tax liabilities. Manage your Investment Club.

Prepare for the great CGT hike - Investors Chronicle

Investors Chronicle.png

Created: 8 September 2009 Written by: Maike Currie Link to article in the Investors Chronicle

Extract: "The rules for calculating CGT on shares still baffles most investors, and a number of readers have requested an article on how the rules governing this work. Dary McGovern, managing director of online trading tool provider, timetotrade, explains that in order to calculate your capital gain or loss when you sell shares, you need to know the acquisition cost or 'base cost' of those shares. This base cost is deducted from the sale proceeds in order to work out the capital gain.

One feature of shares is that unless they are numbered (and most shares are not), all shares of the same class in the same company are identical. If you have accumulated shares of the same class in the same company over a long period of time at different costs and then sell just part of your shareholding in that company - how do you know which of the shares have been sold and therefore what acquisition price or 'base cost' you should be using to calculate your capital gain?

To get around this problem, HM Revenue & Customs (HMRC) introduced the 'Share Identification Rules', a set of rules which define the exact order in which acquisitions are matched to sales. When you sell shares in a company, you need to look at your overall holding of shares in that particular company and match the disposals with shares purchased in the following order:

  • Shares acquired on the same day as the disposal
  • Shares acquired in the 30 days following the date of disposal, matched on a first-in, first-out basis (this is called the 'bed and breakfasting' rule)
  • Shares acquired before the disposal date, which are pooled together and their cost averaged (a 'Section 104' holding).

"The 'same day' and 30-day 'bed and breakfasting' rules were designed specifically to stop investors manipulating their CGT liabilities by disposing of shares and buying them back shortly afterwards for the purpose of realising a capital gain free of tax (because, for example, it is covered by the annual exempt amount) or a capital loss while still, in effect, holding on to the investment," explains Mr McGovern.

The effect of the rules means that in situations where shares in a company are sold and repurchased shortly afterwards, the capital gain or loss is calculated as though the shares disposed of are those acquired either the same day or within the 30-day period following the disposal. In such circumstances, the price received on the disposal is generally similar to the price paid shortly afterwards to repurchase the shares. As a result of the rules, any gain or loss arising on the disposal is likely to be small."

It has never been easier to execute your trading strategy. Our Trigger Trading Technology ® means you can now automatically execute your trades directly in the world’s global markets.

You need never miss a trading opportunity again!

Do you want to:

  • buy when your technical analysis chart conditions are met? Really buy, not just get an email or sms alert?
  • or sell when a support trend line is broken?
  • or back-test your strategy going back as far as 30 years?

TimeToTrade's Trigger Trading Technology™ is truly game changing. It gives you a trading advantage. The power to take your trading to a new level.

Open a FREE TimeToTrade account today to:

  • Trade UK, US and European Shares - apply now
  • Execute trades when your Price, Candlestick, Trend Line, Volume and Technical Analysis chart conditions are met using the Trigger Trading Technology® - learn more - help video
  • Email and SMS Trigger Trading™ Alerts - learn more
  • Trade Off The Chart - learn more
  • Back Test Trading Strategies with up to 30 years of historical data - learn more
  • Create Simulated Trading Accounts to test your Trigger Trading™ Strategies - learn more
  • Real time Forex, UK, European and US stock market data - learn more
  • 170+ Technical Analysis and Candlestick Pattern Indicators - learn more
  • All the tools you need to set up and run a successful investment club - learn more
  • Manage your Portfolio and calculate UK HMRC Capital Gains liabilities and SA 108 CGT Tax Returns - learn more
  • Create Trading Competitions for you and your friends - learn more
  • Apply for a trading account today to get the Live Account Features - apply now

Apply now to try our superb platform and get your trading advantage.

The information and data provided is for educational and informational purposes only. Interpretation and use of the information and data provided is at the user's own risk. All information and data on this website is obtained from sources believed to be accurate and reliable. However, errors or omissions are possible due to human and/or mechanical error. All information and data is provided "as is" without warranty of any kind. We make no representations as to the accuracy, completeness, or timeliness of the information and data on this site and we reserve the right, in its sole discretion and without any obligation, to change, make improvements to, or correct any errors or omissions in any portion of the services at any times. Past performance is not a guarantee of future results. Trading carries a high level of risk to your capital and can result in losses that exceed your deposits. It may not be suitable for everyone so please ensure you fully understand the risks involved.

All services are provided by TigerWit Limited. TimeToTrade is a trading name of TigerWit Limited (a company registered in England and Wales under number 9479466). Our Registered address is TigerWit, 7th Floor, Augustine House, 6A Austin Friars, London, EC2N 2HA, England. TigerWit Limited is authorised and regulated by the Financial Conduct Authority number 679941.

The trading services offered by TigerWit Limited are not available to residents of the United States and are not intended for the use of any person in any country where such services would be contrary to local laws or regulations. Subscriptions to TimeToTrade products are available if you are not eligible for trading services.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investor accounts lose money when trading spread bets with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. All clients should be aware that trading involves risk.

Retrieved from "?title=Prepare_for_the_great_CGT_hike_-_Investors_Chronicle&oldid=31544"