Apologies since Iām pretty certain this issue has been discussed a number of times, but Iād just like to double-check my understanding of previous threads:
For CGT purposes, HMRC requires us to maintain a Section 104 total, which effectively gives us an average share price to use when it comes to partial disposals, whereas Freetrade operates a āLast in/Last outā system which bears no relation to anything we need to use for tax purposes.
I only ask because I note that my āaverage share priceā according to Freetrade went when down when I sold half of my holding, whereas obviously under the HMRC system this shouldnāt have changed.
Freetrade operates first in first out (FIFO) and youāre right the average price is based on FIFO which bears no resemblance to real average
There is another thread dealing with average price and a vote to change this practice or at least give us the option to choose between the two.
Donāt expect this to change anytime soon though since FT have not even acknowledged this is a problem or why FIFO is chosen.
Basically theyāre using the same system as fruit and veg system (perishables) to calculate average