Section 104 calculation with multiple brokerage accounts

How does section 104 apply when trading with multiple brokerage accounts? Do one need to average total amount per share across all accounts? What if different broker trades in different currencies?

So let’s say I buy 100 shares of “Summer” company on freetrade in £
Then I buy 25 shares of "Summer company on freetrade again in £

Later I buy 35 shares of “Summer” company on XYZ broker’s platform in £

Also later I buy 100 shares of “Summer” company on ABC broker’s platform in $.

At some point I sell 25 shares on freetrade platform.

So how all this should be calculated for tax purposes? Should I average my price basis on all 3 platforms per 260 shares and later calculate CTG on 25 sold or it should be calculated per broker? What about different currencies?

Thanks

I would assume it surely is by platform. Maybe I am wrong but that seems logical. Sure an expert will give a better answer soon. :stuck_out_tongue:

1 Like

Here is what HMRC says, there is no mentioning anything about different brokers…

"Shares of the same class in the same company are identical. Suppose you’ve a holding of 12,000 Wilson and Strickland plc 25 pence ordinary shares acquired at different times for different prices. You then sell 2,000 shares. To calculate the gain you need to know how much cost can be attributed to the shares you’ve sold. The capital gains rules for shares allow you to do this.

From 6 April 2008 all shares of the same class, in the same company, are together called a ‘Section 104 holding’. You add together the costs of the shares in this holding: each share in the holding is treated as if acquired at the same average cost."

See what you mean but as people are asking about tax data from FT I would assume it is that but as I said I am probably wrong. :man_facepalming: :joy: Someone will no doubt give you a comprehensive answer :+1:

Probably best to ask your accountant on that one

Interesting… No one has an idea or no one else trades on multiple accounts?
I think it needs to be averaged from all platforms. The reason is very simple.
This is from HMRC website:

"## How to identify the shares disposed of

When you dispose of shares you cannot work out your capital gain or loss until you have matched the shares disposed of with shares you acquired. You’re treated as disposing of shares in the following order:

Description
First Shares acquired on the same day as the disposal (the ‘same day’ rule).
Second Shares acquired in the 30 days following the day of disposal (the ‘bed and breakfasting’ rule) provided the person making the disposal was resident in the UK at the time of the acquisition.
Third Shares in the Section 104 holding."


So if shares are not averaged, one could sell, transfer funds to other account and buy shares somewhere else. I guess the “same day” would not work with different brokers, since there is no broker who would transfer money after stock sale the same day (is there one?) But it is possible to get your money from one broker and transfer to another broker in less than 30 days. So bed and breakfast rule would be not valid.

Am I wrong on this? If not, I guess it is better not to hold and trade one and the same stock across multiple brokers, since it would create nightmare when averaging the price.

Base cost needs to be pooled across all platforms, not just FT. It’s a real pain but so is a lot of tax!

2 Likes

What about ISA and General account? Do the same shares of the same company need to be pooled too?

Yes, it is a pain, especially now, when it seems there is more and more brokers coming with interesting propositions. I think the biggest issue is to have the same stock on different platform denominated in different currency. In such case the gain might turn to loss or loss to gain. Also it is a nightmare to access if the stock is gaining or loosing if you thinking about sale and it is denominated in different currencies in different accounts. FX fluctuations can make all the difference.

I would prefer to have a few accounts, since I had experience with broker going out of business, so I feel better when having different accounts. Plus one of the current brokers has a motto- “how can we make your life more miserable by adding more and more fees and offering very little services”. There is no transfer option of that hell either.