This step-by-step summary explains how to run capital gains tax (CGT) calculations and CGT reports for your clients.
Please be aware of the following important points when using the capital gains tax tool
- The tool looks only at the capital gains and losses position for one Collective Investment Account (CIA) at a time and does not take into account the client’s overall CGT position. If the account is jointly owned, you will need to interpret and apply the information to your clients’ individual circumstances.
- The applicable CGT annual allowance for personal investors and company held accounts will be set in the tool automatically. If you have accounts held by trustees, the tool will default to 100% of the CGT annual allowance. If the trustees are subject to a lower allowance you will need to notify us so we can amend this for you prior to running any calculations.
- If you have sold and subsequently bought units in a different share class of the same asset (for example bundled to unbundled or income to accumulation) this will currently be shown as a disposal within the CGT report and CG tool rather than a conversion. Please be aware that if you process a switch of this type the cost of the continuing asset will also be incorrect.
- If your calculation includes assets held in a model portfolio, the CG tool will base its calculations on the payment and withdrawal preferences set at model portfolio level. This will either be ‘align to target’ (where overweight assets will be sold to bring the portfolio back to its target percentage) or a proportionate sale of assets. If you wish to run calculations on the underlying assets of the model portfolio you will need to unlink the account from the model portfolio prior to using the tool. In order to re-establish the link please contact us.
- Pre migration CGT report - For any account migrated from our previous technology, you will still be able to obtain historical reports as far back as the inception of the plan by using the Pre-Migration CGT Report option. Please note that in order to fully report on the tax year that the account migrated, you will need to combine the Pre-Migration report for the portion of the tax year prior to the migration, with a Capital Gains Report for the remainder of tax year that the migration occurred. Full details of this process can be found in this guide.
For more information, read our user guide.
What you’ll need to get started
- Be set up on our new technology platform and be logged in to your account.
- Have the correct level of access set up to locate the client records you require.
- The client name or account number for the Collective Investment Account you wish to run CGT reports and calculations for.
CGT reporting for a client Collective Investment Account (CIA)
① From the homepage, locate and select the client.
② Click on the ‘Accounts’ tab and select the ‘CIA’ account you want.
③ Click on the ‘Create reports’ quick link and select ‘Capital Gains Report’ from the dropdown menu.
- CGT is only applicable to Collective Investments Accounts so these options will only appear if a CIA for a relevant client type is selected.
④ On the ‘CGT Reporting’ page you will be able to fully customise the report for your clients’ needs.
- Select the timeframe for the report - Tax year to Date, Last Tax Year, Last Month, Last 3 Months, or Last 6 Months.
- Alternatively choose specific dates from the dropdown menu to enter a required date range.
⑤ Choose which format you would like the report to be generated in.
- Select the option you want - Excel or PDF – from the drop down menu.
⑥ Select the date of the report either manually or using the calendar provided. Once all fields have been completed click ‘Generate report’.
- You can access all reports requested for this account in the ‘Generated Reports’ section of the ‘CGT reporting’ page.
- The system automatically lists all reports requested in the last 7 days. You can retrieve reports generated before then by entering the date range you require either manually or via the calendar.
- Click on the ‘Status’ link once it’s changed to ‘Complete’ and open your report. You can save and print from the ‘File’ menu in Adobe or Excel.
Pre-Migration CGT reporting
① For any account migrated from our previous technology, you will still be able to obtain historical reports as far back as inception of the plan. For accounts that were migrated as part of our February 2020 migration you will need to request these from us via your normal Old Mutual contact. For accounts that were part of any subsequent migration, these can be requested via the Pre-Migration CGT Report option. You will need to use the Pre-Migration Report in conjunction with the Capital Gains Report option in order to produce a report for the tax year that the migration occurred .When using the CGT report for the year of migration please disregard the CGT summary page and instead use the total figures on the ‘Realised Gains/Losses’ tab.
CGT Tool – modelling a client’s CIA for potential tax liability
① From the CIA account page select ‘Create Reports’ then ‘Capital Gains tax tool’.
- The first time you use the tool read and accept the disclaimer to continue.
② The first section of the tool shows you all the CGT information held about the account. This includes confirmation of the applicable annual exemption for the client, any realised gain or loss created on the account so far within the current tax year, the amount of annual allowance remaining for the tax year and the amount liable to CGT.
- The tool also allows you to capture and store details for any gains or losses realised externally, as well as update the tool with any allowable losses from previous tax years yet to be utilised. To do this click on the ‘Edit’ button to edit the relevant fields. Once updated select ‘Save’. This will save the data indefinitely until it is either cleared or updated by you at a later date.
- If using the Capital Gain Tax Tool for a migrated account that has moved to our new technology within the tax year in question there is an action you will need to complete prior to running any calculations. You will firstly need to obtain a Pre-Migration CGT Report. From this report you will need to obtain the total gain or loss figure for the tax year up until the point of migration of the account and input this into either the ‘External realised gain’ or ‘External realised loss’ field and click on the ‘Save’ button.
③ The second section of the tool is the ‘What-If’ section where you can model various scenarios and see the subsequent CGT implication.
④ There are a number of options available. Firstly you can choose ‘Sell Assets Manually’. If selected you can enter either a monetary ‘Sell Value’ or ‘Sell Quantity’ of units into the fields next to each asset.
- Untick the check box to exclude a particular asset or assets.
⑤ Once complete select ‘Calculate’ to return results on the gain/loss for each asset in monetary amounts and units. It also shows the total gain/loss figure of all assets included in the calculation.
⑥ The next option is to run a calculation based on ‘Sell assets to reach a Capital Gains target’. Enter the amount of capital gain you want to achieve as a monetary figure. The tool will include any gains or losses already realised on the account and take account of any additional information entered in respect of external gains, losses and allowable losses brought forward. Then choose how you would like to sell to achieve the capital gains target.
- Options include ‘Selling assets proportionately’, ‘Selling assets with highest % gains first’ and ‘Selling assets with lowest % gains first’
- Click ‘Calculate’ and the tool returns results based on realising a capital gain whilst using the sell strategy selected in the previous step.
⑦ The final option is ‘Sell assets to reach a specific value’. Enter the amount to generate from the calculation as a monetary figure.
- Options for selling include ‘Selling assets proportionately’, ‘Selling assets with highest % gains first’ and ‘Selling assets with lowest % gains first’
⑧ Click on ‘Calculate’ to return results. In order to print the output from the What-If tool you will need to click on the ‘Print Options’ button and select either PDF or Excel. This will create the ‘Download Report’ hyperlink which, when selected, will display your report.
- Once generated you will need to save the report locally as it will not be saved on the platform.
Updating book costs following a re-registration
① When an asset is re-registered from another provider the book cost for that asset will be incorrect. You can manually update that cost so it’s correct in any future CGT calculations.
② Search for and select your client’s record from the ‘Homepage’ and select their ‘CIA’ from the ‘Accounts’
③ Select the ‘Transactions’ tab then the ‘Investments’ tab to display a list of all investment transactions.
④ Any re-registration transactions will display a hyperlink after the asset name saying ‘Add off-platform purchase price’. Click on this link.
⑤ A pop up box will appear, enter the ‘Average Purchase Price’ of the units and the ‘Date of First purchase’
⑥ Once complete click on ‘Save’ and the correct unit tax book cost will be used in any future calculations.
How do I run Capital Gains Tax (CGT) calculations and CGT client reports video
Switching between share classes
If you switch between share classes of the same asset it will show as a disposal in the CGT tool and on the CGT Report and cannot be corrected. We will be looking to deliver share class conversion functionality shortly which, when available, will allow a client to move from one share class to another without the transaction being deemed a disposal for CGT purposes. If the use of the CGT tool and CGT Reporting is required as part of your planning on this account it may be worth considering waiting until next year when the functionality is delivered.