In the last few pages, we've looked at the techniques for establishing the base cost of shares. The other half of the CGT calculation is establishing the sale proceeds so that you can work out your gain.
When you sell, the contract note sent to you by your broker will list the name of the company, the type of share, the date and time of the transaction, and the transaction details.
» Example
If, for example, you sell 1,000 shares in Multimower plc for £2.30 each, it will show:
| Proceeds: | £2,300 | |
| Commission (1.65%): | (£37.95) | |
| Compliance charge: | (£5.00) | |
| (£42.95) | (£42.95) | |
| Net proceeds | £2257.05 |
For the purposes of establishing your capital gain, the figure to use is £2257.05. In other words, you can deduct commissions and other charges incurred in the process of selling from the headline figure. Subtract your base cost (adjusted for indexation and taper relief) from this figure, and you have your taxable gain.
As a general rule, HMRC assumes that you sell your assets at the best price you think you can get, and won't penalise you if you have made a bad bargain and sold assets for less than they are worth. But if it thinks that you are selling assets (e.g. shares in a private company) for less than they are worth deliberately to reduce CGT, it has the power to substitute "market value".
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