Selling shares to finance a project

M

Midtown

Registered User
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Hi
I plan to sell some stocks/ETF to finance a project. This will reduce my overall portfolio by ~50%.
50% of my portfolio is currently in one ETF and is +6% (following recent volatility).
The other 50% is individual stocks (10 companies) performance ranges from +11% to +66%.

I am thinking of selling the ETF for the single transaction and simpler tax filing.

What bucket/mix would you sell in the same position and why.
Thanks
 
It doesnt make sense to me to choose one or the other purely based on the gain since acquisition.
 
I would be reluctant to crystallise gains in the ETF until the Funds Sector 2030 recommendations are implemented. You will lock in exit tax at 41% rate and won't benefit from a future reduction in the rate. You will also have a much less diverse portfolio (10 stocks vs presumably 100's in the ETF).

You could sell part of the ETF and part of the stocks that have the highest weighting in your portfolio to stay diversified. Or sell all the stocks.
 
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Midtown said:
I am thinking of selling the ETF for the single transaction and simpler tax filing.
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I agree Midtown. Sell the ETF. You end up paying less Tax because its 41% on a 6% gain, instead of 33% on a 11 to 66% gain.
Corola said:
You will lock in exit tax at 41% rate and won't benefit from a future reduction in the rate.
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No guarantee that this will happen, or when it will happen, or that the new system (e.g. everything on CGT) ends up at a higher rate.
Make decisions for now based on the reality now.
 
@ClubMan I’m not basing my decision on the gains. Just added that for additional context. It just so happens the ETF is the lowest gain.
 
Midtown said:
The other 50% is individual stocks (10 companies) performance ranges from +11% to +66%.

I am thinking of selling the ETF for the single transaction and simpler tax filing.
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An interesting question.

If these are a high proportion of your total wealth including your family home and pension, then diversification is important.

If one share has gone up by 66% you may be too concentrated in that share so I would sell, or reduce my holding in, that share. But as they are all up by at least 11%, then you might not be out of kilter.

I am not sure why anyone would have ETFs and direct shares. I have direct shares and as you seem comfortable with them, I think you should get rid of the ETF. Of course, you might have an ETF to give you exposure to a class of assets which would be difficult to acquire directly.
 
jpd said:
How could anyone advise on this without knowing what the ETF is and what shares you hold?
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You don't need to know the specific shares to advise that they should keep a diversified portfolio. The reference to recent volatility and distinction of individual stocks implies it's a broad market equity ETF.

AJAM said:
No guarantee that this will happen, or when it will happen
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Being in the Programme for Government for consideration in Budget 2026 (October this year) is close enough to wait and see.
 
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While you shouldn't let the tax tail wag the dog, make sure to sell enough shares to use up your annual CGT exemption first.

If you think all your shares have equally good future prospects, then sell the ones with the lowest gain to date, to realize the most tax free.
 
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