Realizing a small P/L to reset deemed disposal

T

theObserver

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I am considering selling then immediately rebuying my positions in two ETFs to reset the deemed disposal if the decline continutes.

These were the first ETF positions I took when I started investing and, back then, I never kept any records. Selling/rebuying would tidy up my financial records and reset the DD clock. My question: is there a disadvantage to doing this aside from the P/L? I know we cannt offset one ETF against another but selling/rebuying the same fund is legal AFIK.
 
Yes, there is nothing wrong with that.

I suppose you are realising a loss and resetting your cost. But what's the point?

Future profits will be higher as the cost will be lower than the original cost
 
It tidies up my financial records, espeically the early years when I never kept any, and the money can hopefully grow and compound uninterrupped for another eight years which brings me up to my potential retirement date.
 
theObserver said:
My question: is there a disadvantage to doing this aside from the P/L?
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Having to pay charges to sell and rebuy?
You'll have to pay exit tax on any gain now?
If you have no records then isn't it going to be difficult to work out why gain and any tax liability now?
 
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There's no charges attached to selling/buying. Trading212 will tell me the realized P/L when i sell. Another 30 days like the last and there won't be any gains to pay tax on !
 
Are you approaching the 8 years?
You have two ETFs.
Are they both in losses?

This is my understanding of it:


If they are at a loss now, if you hold onto them, you "carry the loss forward". If you sell them then you lose the loss.

If they are in profit, and you hold onto them, you can set any future loss in that ETF back against the profit already.
 
Corola said:
There is always a cost when selling/buying due to the spread. The difference between the bid and ask price means you will pay more to rebuy the same number of shares than you sold them for.
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That's a point I never considered. Thank you for bringing it up! I guess the spread is per share rather than per order?
 
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