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When holding a financial asset such as a shares or units in a fund, how do you calculate the (unrealised) gain/loss?

26 June 2023

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Question by David

When holding a financial asset such as a shares or units in a fund, how do you calculate the (unrealised) gain/loss (i.e. the gain/loss on paper)? It sounds as though it should be easy.. Current value minus cost. But what if some of the shares have been sold and then some additional shares bought... what is the cost and therefore gain/loss then?

Answered by Lisa Caplan

Hi David,

Yes, you are right. If you buy and then sell a particular share, the calculation is pretty simple - proceeds of sale minus cost to buy. But if you buy at different times it gets more complicated. The shares are pooled, and acquisition cost is effectively averaged, but there are some twists to that.

Your provider will often send you a tax statement at the end of the tax year with your gains, and your accountant will work it all out for you if it is not straightforward.

Of course this does not matter for ISAs and pensions where there is no capital gains tax.

Lots of detail on this factsheet from gov.uk.

All the best

Lisa

Answered by

Lisa Caplan

Director Foundation Planning

I am a chartered Financial Planner, with over 14 years of experience helping people to understand their financial position and to make good financial decisions. I offer easily accessible and digestible guidance and advice on key areas, so that you can move forward with confidence.