Hi,
I have made a gain on the short sale of a stock.
I entered the position (or borrowed and then immediately sold the stock) in March 2019 - i.e. in the 18/19 tax year. I closed the position (or bought stock to cover the stock I had borrowed) in April/May 2019 - i.e. in the 19/20 tax year.
I have two questions. I've searched and searched but haven't found answers - do forgive me if I'm as badly capable of searching as I am at tax (which is very incapable).
1. In what tax year was my gain actually realised? My rough read of the legislation (and not being a tax expert) seems to suggest it should be 18/19 as that's when the sale occurred. But that seems a completely mad - what if I'd held onto the position past January 2020 when the 18/19 return is due? And there is no way I would have known on the last day of the 18/19 tax year what my gain was as the position was still open then and the gain could not have been realised.
2. I also paid some short interest holding the position - i.e. this is the payment I had to make as in opening the position I borrowed stock from someone. Is this short interest an allowable cost for CGT purposes? There's no way the trade could have occurred without it.
Many thanks in advance for any sage advice.
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