Starting to build the painful XLS on my day off 
I have a question about FX fees and right issues(corporate action).
Do I need to include the FX fees when calculating P/L for each position closed ? Is a bit confusing, so checking Iām doing the right thing.
I received some cash from my broker as part of āCorporate actionāā¦ I guess that has a Ā£3000 allowance that I saw reported here ? Capital Gains Tax: share reorganisation, takeover or merger - GOV.UK
Ok, what makes sense to me is to record each buy and sell without FX fees. As FX fees to buy US shares for instance are taken before buying and after selling, as that is where the currency conversion happenā¦ so thereās no point to include them otherwise theyāll alter the P/Lā¦
Takes this example:
18/08/2020 FX_FEE 7 GBP fx fee taken for 51.3855643 Western Digital Corp (US9581021055) on 18-Aug-2020 14:11:03 GBP CASH_OUT -7
18/08/2020 SELL 51.3855643 Western Digital Corp (US9581021055) @ USD 39 (@ 1 GBP = 1.31090 USD) on 18-Aug-2020 GBP CASH_IN 1528.748957
11/08/2020 BUY 51.3855643 Western Digital Corp (US9581021055) @ USD 38.10000 (@ 1 GBP = 1.31090 USD) on 11-Aug-2020 13:49:40 (Requested 1500 GBP) GBP CASH_OUT -1493.47
11/08/2020 FX_FEE 6.72 GBP fx fee taken for 51.3855643 Western Digital Corp (US9581021055) on 11-Aug-2020 13:49:40 GBP CASH_OUT -6.72
How would you calculate the P/L ? Just SELL - BUY ? or SELL - BUY - (SUM of FX FEEs ?)
Also just to add to the question, when it comes to stamp duty deduction I guess the following applies:
P/L = Total SELL - Total BUY - Stamp duty.
Hey @dropbrick 
,
The FX fee does not affect the position result as they are already included when you Buy & Sell the shares. You may see the applied FX fee formula along with an example in the article here.
Edit: FX Fee do not apply for payments arising from corporate events.
As for the Stamp Duty tax, 0.5 % is applied on share purchase on the LSE and it is deducted from the final result (Profit/Loss).
I thought that was not the policy. See here:
Which is correct?
Strictly speaking, for UK investors, HMRC does not allow fx costs as a deductible expense against taxable profits. Only brokers fees are deductible. It is unclear whether the.0.15% is a true fx cost or actually a disguised broker fee. It would reduce my taxes if it could indeed be classed as a broker fee. We know that Trading 212 makes a profit on the fx. Fair enough, but that makes it a broker fee, surely?
My knowledge about the treatment of FX cost is based on several conversations about this with HMRC in regard to similar fx charges made by other brokers. I imagine there are tax professionals amongst the community who can also verify this.
Noted @Richard.W, my bad. Weāve recently removed the 0.15% fee for corporate events and it is indeed no longer applicable. Iāll edit my initial comment, thanks for pointing this out.
As for the second topic - Iāll update you later on.
It may help if I share a recent conversation with HMRC. My query was with regard to charges made by AJ Bell.
Perhaps someone else would like to try a similar query and see what HMRC say. Perhaps phrase the question slightly differently so that it captures what happens with Trading 212. Note that my query was phrased in a way to give HMRC the opportunity to tell me that the fx charge could be treated as a deductible broker fee. They did not bite.
HMRC are very responsive to question sent to them via Facebook messenger.
I have one further idea. HMRC does not specify what exchange rate should be used. Tourist rate, spot rate, spot mid rate, spot buy rate, average day rate? I have seen UK tax advisors remark upon this lack of specificity by HMRC. I have seen tax advisors conclude that you are free to use any reasonable published available rate.
So suppose we elect to use the Mastercard buy or sell rate. $1000 stock bought with Trading 212 currently costs Ā£719.69 including the fx fee. But the Mastercard cost of a $1000 purchase is currently Ā£720.93. So a Trading 212 transaction lies within the spread of the Mastercard buy and sell rates. The Mastercard rates are generally accepted as being about as good as retail clients can expect to obtain, better than tourist rates. Starling, Monzo, etc use the Mastercard rates.
This makes me think I one could use the Mastercard buy and sell rates. I buy stock worth $1000. I could record its cost as Ā£720.93. I am following HMRC guidance by using a documented and publicly available currency buy rate. But I am not trying to take the Trading 212 0.15% fee as a deductible cost. In fact, I record my cost as what I am charged by Trading 212, Ā£719.69. I can defend this as being no greater than the Mastercard spot buy rate.
This approach would not work with a purchase made with AJ Bell. Their 1% markup puts the cost of $1000 beyond the Mastercard cost.
Hi Guys, Iām after some guidance/favour. I need to work out my gains/losses for shares of 3 companies. These are a little complicated with bed and breakfasting rule.
I have looked at the guidance and examples on HMRC and they donāt exactly fit my scenario. Is there anyone here who can help me with working these out please?
I know that an accountant would be a good idea but thatās all I need help with and Iām not sure if any accountant would take this on without charging too much.
So if you can help me out with this I can send my transactions to you, Iād be interested to see the computations. If you know someone that can help for a reasonable fee Iām happy with this option as well.
Any offer/suggestions are welcome.
Thanks in advance.
as a first step why not call HMRC and ask them a general enquiry about your scenario?
Thanks for the suggestion @trader787, the last time I called them it took me ages to get through and then it took quite a while for the person I was speaking with to get what I was asking (separate issue) so Iām not sure how quickly I can get through to someone who will know what Iām talking about straight away.
Greedy, they tax us on absolutely everything. Thatās why Iām sticking with An ISA. Tempted to use CFD but dreading the tax return.
Good point. Being in a country without CGT, it is a kind of externalities that never bother me 
Being in a country without CGT, it is a kind of externalities that never bother me
I should move to your country 
! Which country is that if you donāt mind me asking?
Netherlands 
We have a wealth tax, that is calculated on fictitious returns; generally speaking, youād get taxed less than what youād be supposed to, but it could be that the reverse is true if youāve had very poor returns. Also, this is a yearly cash outflow, regardless of your market transactions.
But no CGT, no dividend taxes either, and dividend withholding taxes paid internationally are deductible from your income tax.
Overall, short of a tax heaven, itās pretty much the best tax system you could ask for an investor. We donāt have ISAs, since any general investment account is already tax free.
Overall, short of a tax heaven, itās pretty much the best tax system you could ask for an investor.
Sign me up, Iām moving over next week, Haha!
Seriously though, that is super-awesome!
Waiting list for renting in Amsterdam is now 14 years. 
We are a little off-topic, butā¦ thatās great. 
Although taxes are not high in Croatia either, CGT is not paid if the shares are held for more than 2 years (FIFO), otherwise it is 10%, and wash sale is also allowed. The only drawback is that there is no double taxation treaty with the USA, so they withhold 30%.
Can you get the 15% withhold tax Americans took as a credit or ask for a tax refund?
