I have a client with around £200k of US stocks which he actively trades, to the point his trades are about £200k per annum, often the same stocks bought/sold, with about 50 stocks, and 100 trades per annum.
I am happy this is not a "trade" but is an "investment" activity for tax purposes.
Whilst I can deal with the FX issues, for share identifcation the only reports I can get are US rules, which would mean a mamoth task to do it properly and work out the right share pools from transaction level reporting, especially as many dividends are reinvested so there are a lot of micro purchases going on.
Whilst its clearly "wrong" to use the wrong share identification methods, if we consistently use US rules does anyone think HMRC will give a stuff? I know HMRC can agree to non-conventional methodologies. On a practical level if a tax investigation arose we could send them all the US reports and ask them to work it out their way.............good luck with that. I doubt the tax would be much off over a 3-5 years period as it should even itself out.
Am pondering and would appreciate any thoughts.