A novel use for CDF account?i

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I have not yet used CDFs. But wonder if this mild use makes sense. Some of you might enjoy checking it and telling me if this is a sensible idea or if I am missing something.

I have 330 shares of TMO (Thermo Fisher Scientific) with another broker whose average purchase price is $27 per share. Today’s price is $283. I would like to realise some of those gains against my £12000 capital gains tax allowance in this UK tax year, but without actually selling the shares; one reason is that the broker where they are held charges £9.95 + 1% fx fee.

So instead, I will buy 10 shares TMO in my T212 Invest account, sell 10 TMO in CDF account. A day later I will close both positions. My CG will be the gain/loss on the CDF and the gain on the sale of shares in the invest account figured from my average base price of (340x27+10x283)/350. I calculate the cost of this, taking account of spreads and overnight interest will be about $14. But I will now have about $2000 to claim against my remaining CG tax allowance, which will save me tax at some future date of 20% of $2000.

For the hedging to work best I will want to complete trades in the Invest and CDF accounts at nearly the same time. But there is no way to have trading windows open to both simultaneously, right?

Is there any way that those more experienced think this can be done best with limit orders?

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I successfully followed this strategy. Because I wanted to guarantee a particular value of the capital gains achieved (in order to exactly use up what remains in my 2019-20 £12k tax free allowance), I also bought a appropriate number of USD/GBP. This way my CG became fixed whatever the change overnight in TMO share price or USD/GBP exchange rate.

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To understand why I do this, one has to appreciate that if a sale and purchase happen on the same day then then those two are matched for CG tax calculation; the same is true if the sale follows the purchase within a 30 day window. But if a purchase is made on Monday and then the sale on Tuesday the gain is calculated against the average cost of the holdings of that company’s shares.

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This whole post went over my head, but Im saving it for when Im better versed in CG tax and CFDs :grin:

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