Renew Share Discussion Threads

[rivaldo] 03/1/2017 09:36

Happy New Year RNWH'ers :o))

Large transactions already - 328,000 shares traded at 445p this morning (all listed as Buys on m.o.n.e.y.a.m).

[fbrj] 23/12/2016 14:15

Gengulphus - a most comprehensive summary. Thank you!

I understand that if you are a executor or personal representative of an estate then you have the full annual allowance available (ie not 50%) re gains made during the administration period but just for the tax year of the death and the following 2 tax years. The 50% allowance relates to trustees.

[gengulphus] 23/12/2016 13:10

Just to spell out the situation with regard to CGT and IHT:

* Assets you still own at the date of death need to be valued for IHT purposes. The value used is their value on the date of death - this is known as their 'probate value'.

* Any gains or losses from your original purchases to probate value are completely forgotten about as far as CGT is concerned. I.e. essentially the executor starts with a clean sheet of paper for CGT purposes as far as those assets are concerned, with each of them effectively having been 'bought' at probate value. This incidentally is a great relief to executors, especially in the case of long-term shareholdings whose acquisition cost may not be easy to determine!

* With one exception, the executor *does* have to account for CGT on gains and losses from probate value to the value at which the estate subsequently disposes of them. The estate has a CGT allowance for this purpose, which IIRC is half the normal CGT allowance.

* The exception is if the asset is 'assented' to a beneficiary - that is, passed unchanged to the beneficiary as part of their inheritance. In that case, the beneficiary has to account for CGT on gains and losses from probate value to the value at which they are disposed of, if and when they are subsequently disposed of.

* The executor or administrator of your estate may have to deal with CGT in one other case: if you dispose of assets in the tax year of your death or in the preceding tax year, and you needed to submit a tax return for that tax year but had not done so by the time you died, then the executor needs to submit it for you - and if that tax return requires CGT to be reported, the job includes reporting it. Unfortunately, there is no similar protection for the executor against having to establish the acquisition cost in this case as there is for assets still held at the date of death... One moral of this: if expecting to die, *don't* sell potentially-CGT-bearing assets to 'tidy up' your estate and make life easier for your executors - it is liable *both* to cost CGT *and* to make life harder for them!

And on the subject of the IHT relief that applies to some AIM shares, including RNWH as far as I am aware, it is called 'business relief' and is described in the pages linked to from . Mostly, it applies to businesses owned by the deceased rather than to shareholdings, but if you look through those pages, there is stuff about holdings of 'unquoted' shares/securities - and somewhat oddly, being traded on AIM doesn't make shares 'quoted' for that purpose. (Note it doesn't actually make them 'unquoted' - it's just that the absence of anything making them 'quoted' leaves them 'unquoted'. That's important in the case of companies that are both traded on AIM and listed on a foreign stock exchange: usually, the latter makes them 'quoted' and being traded on AIM does nothing to reverse that...)

The rules about replacing investments that have ceased of qualify for the relief are in the section called "Business relief: Replacement property", starting with .

Gengulphus

[nurdin] 23/12/2016 08:32

grahamburn

Good stuff....thank you for that.Helped ease my mind a bit...son will be even more pleased :o)

[hvs] 23/12/2016 08:28

grhhamburn

GET A LIFE

[wad collector] 22/12/2016 22:23

If , like me , you are unfortunate enough to act as an executor on a complex estate , you will discover that the IR is completely overwhelmed by workload. I think they are the most helpful of all IR depts , even if they do preface every conversation with " I am sorry for your loss...."
If they are presented with a tidy piece of paperwork they are very unlikely to be terribly interested in the justification of transfers and disposals ; they will not go looking for a paper trail unless you trigger their interest in some way , like a huge estate or some irregularity in the process. If you divide the number of tax inspectors by the number of estates , then you will be tending to zero.
As long as you do things honestly , you will be very unlucky to suffer for not keeping contemporaneous notes.

[grahamburn] 22/12/2016 20:43

nurdin.

fbrj is correct - CGT liabilities (or losses) die with you, so there will not be any tax due in that regard on death, though, of course, any increase in capital value will add to the value of the estate so may lead to a higher IHT charge (except for AIM shares as above).

If beneficiaries take on the shares after death, then they take them at the value as at the date of death. The beneficiaries would then be liable for CGT (or loss claims) when they sell the shares based on that value.

If, however, the shares are sold by the estate and proceeds distributed in cash to the beneficiaries, then the estate will have to pay CGT (or claim losses) based on the difference between the sale proceeds and the value as at the date of death. I believe that the CGT tax free allowance is much less for an estate than for individuals who are alive.

[nurdin] 22/12/2016 19:00

Ah thats interesting fbrj, thanks ,didnt know that.Will have to look into it.But I suspect they would have to face CGT when they dispose off the shares?

[fbrj] 22/12/2016 18:42

I think you will find that there is no CGT on death ie any potential liability dies with you. The estate might be liable for CGT during the administration period (ie from the date of death, if there are any disposals). Any assets distributed to beneficiaries are valued at the date of death value and that value is subsequently taken as the cost price, for CGT purposes, by the beneficiaries.

ps - I have held RNWH since Nov 2013 (166p). With the share price riding high it has now become one of my core holdings!

[nurdin] 22/12/2016 18:23

You can escape IHT but you can do nowt about CGT.I have been taking out my CGT allowance for last few years but still would face,or rather the beneficiaries of my estate would,a large CGT bill.

[grahamburn] 22/12/2016 17:34

wad, thanks for that, though the source for that quote would be helpful (as it doesn't seem to come from HMRC itself).

If this is the case, then it just seems too complicated to me (eg all the proceeds etc). Once one has departed the scene, there would have to a very robust paper trail - possibly going back yearswith that 3 year rule - to prove that the deceased has complied. After all, the deceased will not be around to support the paperwork!! (In any event, ploughing all the proceeds of a sale into other AIM shares may not constitute a sound investment - for instance my RNWH holding is currently showing a 635% gain which has somewhat unbalanced the particular portfolio it is in. I'll ignore the fact for this discussion that its AIM status is irrelevant to me as it is in my SIPP.)

Furthermore, according one of the Estates Partners at my solicitors, HMRC do not publish a definitive list of qualifying AIM shares - each holding is examined on its merit after death and prior to Probate - so the pre-deceased person may end up screwing up their carefully laid plans anyway.

[daisy15] 22/12/2016 16:33

The ISA wrapper disappears on death so the underlying asset being an AIM share will still qualify for relief

[3800] 22/12/2016 16:25

I have often wondered if AIM listed shares held whin a ISA still qualify for IHT relief can anyone confirm if this true or not?
3800

[wad collector] 22/12/2016 16:08

As long as you use the proceeds entirely to buy another IHT exempt share then you do keep IHT exemption. The IR really do seem to want us to do it!



"Many investors considering investing in AIM for IHT planning purposes are under the impression that it is necessary to hold the same shares for the entire 2 year period. This is not the case and relief is not necessarily lost if the investor disposes of qualifying shares and replaces them with other qualifying shares. However, in order to still qualify for relief the whole of the sale proceeds must have been used to purchase the replacement shares. HMRC is very generous in the time it allows for reinvestment with the both the sale and purchase only having to take place within three years of each other."

Meanwhile moved to a new 10 yr high at 448 ....excellent . £5 next yr?

[grahamburn] 22/12/2016 11:44

Not too sure what you are saying, wad.

Are you saying that you can sell one AIM share which you have held for more than two years and roll the same funds over into another AIM share?

I haven't checked the rules (may do when I have time), but I very much doubt such a lax loophole exists for individually held shares (ie in a standard nominee account).

However, I suppose, if you hold an AIM-designated fund where shares are swapped around within it, then that may be the case, as each payment into such a fund would start a new 2 year time limit.

[wad collector] 22/12/2016 08:48

Yes but under the rules you can buy another AIM stock and not lose the exemption time frame from the original purchase.
Are we starting a bid rumour?

[grahamburn] 21/12/2016 14:09

Hardly worth asking that question as the answer is obvious - the IHT exemption would be lost.

[ingroid] 21/12/2016 12:06

ingroid

Indeed,but what happens should RNWH be taken over by a FTSE co?

[wad collector] 20/12/2016 19:32

Another long term benefit to RNWH remains it's AIM status . From an IHT avoidance perspective there are few better AIM shares , especially since the ISA rule change. It is a pearl among swine ,to mix a metaphor.

[rivaldo] 19/12/2016 10:02

VHE should benefit from £2 billion earmarked by the Government for building on brownfield land:



And looks like AMCO did terrific work on the recently re-opened Severn Tunnel:

[rivaldo] 14/12/2016 09:49

Big report out today re the need for loads more telecoms masts and infrastructure to support 4G and future 5G networks in the UK:



which has to be good news for RNWH's Clarke Telecom - "the UK and Ireland's premier wireless telecommunications infrastructure service provider".

[rivaldo] 08/12/2016 11:40

SCSW had a nice summary of RNWH's results last weekend, concluding that it's a "Strong hold for more".

They met with the new CEO (who's actually already been there 18 years running the nuclear and engineering services divisions).

"Strong growth" was seen in nuclear and rail, and water is now ramping up being at the start of the AMP6 cycle. Telecoms is picking up (as we've seen from recent news), and gas has been revamped.

Interestingly RNWH are still looking out for more acquisitions in addition to the recent Giffen purchase, particularly in water.

So SCSW say "there could be deals and upgrades in 2017".

[wad collector] 02/12/2016 17:00

It does , though as harrogate suggests , it could easily drop back in the short term. I have traded these a fair bit as well as holding long term and have so far resisted the temptation to top slice . They are now the biggest holding in my portfolio and that usually makes me nervous . But not here.

[rivaldo] 02/12/2016 11:06

Wad collector, only last month WH Ireland increased their target price to 470p, and Numis to 450p.

I think it's just the case that a seller or two have been holding the price back, and the dam has now burst.

IMO given the fundamentals, the secure income streams and the potential for accelerated growth from a number of sectors and projects RNWH should continue to be a good investment for some time to come.

[harrogate] 02/12/2016 10:44

The broker notes all came out just after the results so I doubt it. Nothing new in them and in fact I thought the 2018 EPS number was disappointing and thought it would hold back the price. A couple of II have increased holdings and it looks like they got a positive response form the various City meetings they held after the results. Looks fully priced to me but what do I know!!