Selling or switching units in a taxable portfolio may create a disposal, even though the money never arrives in your bank account.
Capital gains tax can apply when you dispose of an asset for more than its base cost, and a disposal can include a sale and, in some circumstances, other transfers or events.
The taxable amount is not simply the full sale proceeds. The calculation considers proceeds, allowable base cost, exclusions, losses and the portion included in taxable income under current rules. Your marginal tax position can then affect the outcome.
Different account structures may receive different treatment, and transaction statements are needed to establish costs and dates.
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For one taxable investment, locate the original purchase records, subsequent contributions, disposals and latest tax certificate. Do not rely only on the opening value shown on a recent platform statement.
Ask your advisor or tax professional
- Which proposed transactions are disposals for tax purposes?
- What base-cost information supports the estimate?
- Are losses, annual exclusions and other holdings being considered correctly?
Capital-gains rules, rates and exclusions change and can be fact-specific. Obtain a current calculation before a material disposal.