Retaining capital gains history when transferring shares

[Exspextations]

I have transferred part of the shares of one of my investments to my wife. This was a zero cost transfer, but for tax purposes I need to carry over the associated capital gains history for the transferred shares to my wife's portfolio.

I tried using the Transfer out and Transfer in options, but this looses the capital gains history in my wife's portfolio. So what is the correct way to do this in Fund Manager?

[Mark]

Hi Exspextations,

If you have more than one lot, use the "Transfer Between" wizard. This will record 1 transfer out, plus 1 transfer in transaction for each lot transferred, so you maintain your taxable cost basis. If you only transferred shares from a single lot you can just record the transfer out and 1 transfer in yourself, or still use the Transfer Between wizard. Notice when you record a Transfer In you can record the tax cost basis date/value separate from the transfer date/value.

[Exspextations]

Hi Mark, Thank you for the tip. Took a bit of searching to find the 'Transfer Between' option but it is clear how to do the transfer. The only question I have is which accounting method I should use - presumably with many lots over several years I should use the 'Spec lot' option to ensure gains are recorded correctly or is is the FIFO method?

[Mark]

Hello Exspextations,

If you've ever sold any of the shares in this "Source" investment before, what did you use for the accounting method when determining which shares were sold, and the gains? Choose that accounting method in this dialog. If you have never sold shares, it doesn't matter. If you choose the "Help" button in the Transfer Between dialog it explains more about what that accounting method option does:

The accounting method to use when determining which shares are transferred from the "Source" investment. The accounting method determines which shares have already been sold. Un-sold shares are transferred out using a first in first out method. The transferred out shares determine the tax cost basis value and date and also the out of pocket (OOP) cost for the transferred in shares. The total transferred out tax and OOP basis is equal to the total transferred in tax and OOP basis.

[Exspextations]

Hi Mark,

I did a zero cost base transfer of shares as you suggested using the AVG cost method. However, I have now received cost basis data from the share platform that the shares were previously held on.

Unfortunately, while the number of shares and price provided by the platform on the date of the transfer are the same as calculated by Fund Manager, the cost basis they provided is not the same as the one calculated by fund manager - the Fund Manager figure is some GBP 6,400 lower.

The shares held on my previous platform since 2008 are a mix of share options, share bonuses and reinvested dividends since this date, together with several sales. Therefore rather than the discrepancy being an issue with Fund Manager, it is more likely that data were not added manually to Fund Manager consistently.

The data from the previous platform is the one that will be accepted by our tax authorities. Is there therefor any way I can adjust the cost basis in Fund Manager to agree with that from the share platform - re-entering everything since 2008 is not an option!

Apologies for the additional question and hope you have a solution to my conundrum.

[Mark]

HI Exspextations,

To adjust the cost basis, you'd need to edit the transactions. For example, if you have some transfer in transactions, edit them, and you can adjust the cost basis.

[Exspextations]

Hi Mark,

Thank you for your feedback.

As I transferred all the lots from my old platform to my current one. I decided it was quicker to input the lot data manually from the report provided by my old platform. After completing this I now had my shares in a new portfolio with the correct tax cost basis.

I then transferred shares to my wife on a zero-cost basis using the Transfer Between option and the AVG accounting method. This transferred the correct number of shares with the correct tax cost basis (Ignoring a software rounding error of 4p)

When I look at the Open Lots report for the shares transferred to my wife I can recognise most of the lots from the original transfer data. The remainder are presumably part lots required to derive the exact number of shares required to make up the number transferred. The Open Price is presumably the average price required to calculate the correct tax cost basis and the Price the value of shares on the date of transfer. So far, all understandable.

What I don't understand is the Open Date. The oldest shares that were originally transferred from my previously held platform were acquired on 14th January 2014, i.e. 3949 days prior to the transfer to my wife, while the most recent were acquired on 26th September 2024, i.e. 41 days prior to the transfer to my wife.

Where does the Open Date of 30th March 2008 come from as this suggests the shares have been owned for 6077 days prior to the transfer?

For my understanding, grateful for a clarification on what determines the Date Acquired in the Tax Cost Basis calculation.

Thank you.

[Mark]

Hi Exspextations,

In the "Open Lots" report, the "Open Date" field is the date the shares were acquired. If you used a Transfer In transaction, this would be the tax basis date acquired field. If you use a buy, this is the buy date.

[Exspextations]

Hi Mark,

Apologies, but I still don't understand the Open Date issue of the shares transferred from my to my wife's portfolio.

As I said in my previous post I used the "Transfer Between" option to record the transfer the shares to my wife to maintain the tax cost basis.

The dates acquired for each lot in my portfolio are the correct acquisition date. The oldest lot of 661.119 shares transferred to my wife were acquired on 14th January 2014, i.e. 3949 days prior to the transfer to my wife, while the shares in the most recent lot were acquired on 26th September 2024, i.e. 41 days prior to the transfer to my wife.

As the share lots were manually input into a new portfolio created for my shares there is no prior history and the oldest date should therefore be 14th January 2014.

So where does the Tax Cost Basis / Date Acquired date of 30th March 2008 come from for the shares transferred on 18th November 2024 using Transfer Between option (see attached)? NB the tax cost basis per share is correct!

Clarification would be appreciated.

[Mark]

Hi Exspextations,

If you go look in your portfolio (source portfolio) and look at the transaction for those 661 shares, how is that recorded? Maybe it is a Transfer In with a "date acquired" set to 2008?