NAVIGATING THE CORPORATE MAZE: UK EQUITY HELL

DATA EXTRACTION PROTOCOL: E*TRADE EDITION

First, you'll need to hack your way through E*Trade's labyrinth to extract these essential files. Because apparently, combining this into one report would be too damn convenient:

• Login to E*Trade. If you don't know how to do this, I dunno what to tell you.
  
• Select your stock plan. Click stock plan, not the company name.
  
• Benefits Report: This is everything you've been awarded. Navigate to 'My Account' > 'Benefit History'.
  
• Click Download, and select 'Download Expanded'. Put it somewhere you'll find it. Don't look at it. It's ridiculous.
  
• Gains/Losses Report: Sail on back to 'My Account' > 'Gains & Losses'. Ignore their calcs. They think we're in the US.
  
• You'll want the max allowed. They seem to cap it at 5 years. If you've got RSUs from before that...you'll wanna massage the spreadsheet.
  
• You'll want your companies Stock Price History: Because correlating the vesting value to a vest is apparently too hard to put in the benefit history, and can't be matched easily from the gains and losses....E*Trade thinks you need a treasure hunt. So I've included this Python Script. Fun times.
• Finally we need an average daily price GBP/USD data grabber and a US Holidays Downloader. Because we aren't in the US, and things get complicated when E*Trade marks the vest date as a date that the stock can't actually vest on. They are on it, aren't they?

THE KAFKAESQUE WORLD OF UK STOCK TAXATION

And now we've got what we need....welcome to the bureaucratic nightmare that is RSU taxation in the UK. Whoever designed this system probably gets paid by the complexity:

• Income Tax + NI when your shares vest - because getting paid in shares wasn't complicated enough already. Don't forget you'll pay the Employer NI! But hey, that comes out of *our* pool if the company doesn't sell it behind the scenes.
• CGT when you sell - calculated using a method that feels like it was designed by a sadistic mathematician
• Everything's in USD but needs to be in GBP - and the best we can do is a daily average from Yahoo
• Did I mention the CGT method?

WHY THIS APP EXISTS

Because someone had to deal with this hot mess. Here's what it handles for you:

• Connects the dots between E*Trade's fragmented reports that should never have been separate
• Deals with HMRC's currency conversion needs so you don't have to
• Implements their Byzantine Section 104 pooling rules (more on that nightmare below)
• Adjusts for non-business days because US holidays are too difficult for E*Trade to account for.
• Creates a paper trail so detailed it would make an auditor weep with joy

SECTION 104: A SPECIAL CIRCLE OF HELL

Welcome to the UK's share pooling system, where basic math goes to die:

• Same-day rule: Because selling and buying on the same day would be too straightforward without special rules
• 30-day rule: AKA the "bed and breakfasting" rule, because apparently we needed a cute name for tax avoidance prevention
• Section 104 pool: Where your shares go to lose their identity and become part of the collective. Resistance is futile.

WHAT ABOUT MY STOCK OPTIONS? AND I BED AND SIPP/ISA - HELP ME TOO!

If you're transferring into your own ISA or SIPP - bed and whatevering - you're on your own my love. For options though:

• We are gonna treat them as RSUs internally. It's fine. They are stock.
• We are only really concerned with cash exercise and hold, or sell to cover and hold. E*Trade *wonderfully* doesn't list stock options 'exercise and hold' in it's gains and losses file. It does have same day sales of them, but these matter not for CGT.
• But...maybe it's elsewhere in the E*trade site. Who knows. What I did was add a manual adder. Just add how many options you kept after exercise, and the date, and the grant ID - and this will work out how they interact with your pool.

WHAT ABOUT THE FEES?

Oh, you mean the fees that E*Trade takes to sell tax withholding shares that are forcibly sold? And the ones on each transaction?

• Yeah, I would add this, but e*trade doesn't list them in the gains and losses file. So you'll have to add them manually. Sorry.
• But here's a tip -
  • download the CGT disposals generated by the tool
  • open in excel
  • add a column for fees
  • add a formula =14.99 / exchange rate for that row
  • Delete any that didn't attract commission (these are usually the 'sold extra RSU as not enough to cover tax ones - they are rare)
  • Sum all that an you have offsettable fees
• I'll probably add this later. But for now, you're on your own.
• As far as I can tell - the $25 wire fee and the exchange rate fees are not offsettable against CGT. But I'm not an accountant. Although you might assume I am.

SURVIVAL STRATEGIES

• Play the tax year game - split your sales across years like you're playing 4D chess with HMRC
• Watch out for the 30-day trap - HMRC is always watching, waiting for you to mess up the bed & breakfasting rules
• Document everything because when HMRC comes knocking, "the dog ate my exchange rate calculations" won't cut it
• Remember: just because you can calculate this manually doesn't mean you should. That's what this app is for. Life's too short.

THE BOTTOM LINE

This app exists because E*Trade and HMRC won't give you the tools you actually need. It's built by someone who got tired of spreadsheets, manual calculations, and the soul-crushing realization that no one in authority thought this system needed simplifying. Enjoy the automation, and maybe one day they'll realize that tax systems shouldn't require 'a very specific set of skills' to navigate. But just be glad you're hopefully not on Universal Credit.