Capital Gearing Dividends - CGT

Capital Gearing Dividends - CGT

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Stock Name Stock Symbol Market Stock Type Stock ISIN Stock Description
Capital Gearing Trust Plc CGT London Ordinary Share GB0001738615 ORD 25P
  Price Change Price Change % Stock Price Low Price High Price Open Price Close Price Last Trade
0.00 0.0% 4,190.00 4,150.00 4,190.00 4,160.00 4,190.00 16:35:23
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Capital Gearing CGT Dividends History

Announcement Date Type Currency Dividend Amount Period Start Period End Ex Date Record Date Payment Date Total Dividend Amount

Top Dividend Posts

finkwot: Gengulphus, Thanks. I've found some of the information I need, still looking for some. I'm working from a list of Commercial Union share acquisitions from 1982 to 1997, giving number of shares, month of acquisition and total cost for each. What puzzles me is that one entry, for May 1997, gives only the number of shares acquired; the cost column is left blank. The totals of all shares acquired and of cost for the whole series of acquisitions have been added up carefully, with no allowance for the cost of the May 1997 acquisition. Apart from this, the record was prepared conscientiously (there are multiple pages of other records for other shareholdings; this is the only lacuna I've found). There are two possible explanations I can think of - either there was some complication and the person who kept the records was unsure how to calculate the cost, so left it blank intending to add it later, or for some reason he thought the cost was nil. So my question now is, are there any circumstances in which shares can be acquired at nil cost for CGT purposes? It's an odd and not very large number of shares, so I doubt it was a straightforward market purchase. There was a dividend payment in May 1997, so it might have been a scrip dividend. The value of the shares acquired is rather higher than the value of the dividend (it would add up if the share price had been 570p, but it was in a range either side of 700p in May 1997), but at the 1996 AGM a motion was proposed to allow scrip dividends to be paid at a higher level than the cash dividends (for reasons to do with Advance Corporation Tax). The example given in the 1996 proposal is for an increase of 25% over the cash level, which would give a price of 712.5p, so this may be a possible explanation for the origin of the shares. I don't believe it could justify an acquisition at nil cost, but it might explain uncertainty about what the correct figure was. However, the notes with the 1996 AGM letter have a fairly clear explanation of the tax implications, and the record-keeper has done much more complex calculations elsewhere without apparent difficulty, so I'm still puzzled. Also, I haven't yet discovered if there was in fact a scrip alternative for the May 1997 dividend, and if so, whether it was at a higher level than the cash dividend. (edited 1 July 22.18)
gengulphus: finkwot, I'm afraid I can't really help with questions about the 31 March 1982 rule - it predates all my experience with shares (though only by a few years in the case of my small number of BT shares held ever since the first round of privatisation). On historical prices, I do have copies of the CGNU annual reports for 2000 and 2001 - I've never owned CGNU shares, but I downloaded them from Aviva's archived reports page years ago when they were still there. (now the only trace left of that on seems to be the statement "Please note that all presentations before the Group's name change to Aviva plc on July 1, 2002 will be branded CGNU plc." at the bottom of a list whose earliest entry is dated in 2004...). Unfortunately, they don't contain anything about CGT - some companies make a habit of putting CGT information into an end-of-report "Shareholder information" section, but apparent not CGNU/Aviva. Apart from that, the only thing I can suggest for a share price that long back is that I know that years ago, the London Stock Exchange ran a paid-for service called something like the Historic(al) Price(s) Service - I've used it once around 15 years ago. Whether they still do, whether its charges are reasonable if it does, etc, I'll have to leave you to investigate. Gengulphus
finkwot: Is it true that to calculate CGT on shares acquired before 31 March 1982 I have to use the price on 31 March 1982? Is this obligatory even if that is to my disadvantage? Do I take the original costs of acquisition and add them to the share price on that date? Is there any simple way to find out share prices for that date? I hope it would be easier than for other dates in 1982. Also, when did this rule come into effect? I ask because I'm working from notes prepared by someone else, and I don't know if he has recorded the original price at acquisition, or the 31/3/1982 price. If I can't find out the relevant price I may have to assume he already updated his records when the rule came in, but that depends when it happened. Thanks in advance for help with any of this.
david77: Type a list in wordpad then copy and paste to the stonebanks calculator Company date (6 figs 290817), b or s, share price (pence), total (£xx.pp)
gengulphus: What happens if there simply is no record? Do HMRC assume zero cost? You produce an estimated cost, put some sort of explanation of the estimate in the appropriate 'additional information' box, and tick the box saying that you've used an estimate. You want the estimated cost to be as high as possible, so that the gain over it is as low as possible. All HMRC do is look at the estimate and decide whether to challenge it - which they're likely to do if they think it's too high, but not if they think it's too low. Using an estimated cost of £0 is quick, easy and safe. You may be able to produce a safe higher estimate - e.g. if you know that the shares were bought during a particular period but don't know exactly when or how much was paid for them, then the number of shares times the lowest share price in that period is a safe estimate. But that does require researching what that lowest share price was, so involves more work than an estimate of £0. One does have to exercise some judgement about whether trying for a higher estimate is likely to be a worthwhile use of one's time. E.g. if it's only reasonable to expect to be able to raise the estimated cost by a couple of hundred quid, then the CGT saving at 20% is about £40 - which probably doesn't justify spending more than an hour or two on it (depends on the value you place on your time, of course!). If it's a matter of raising the estimated cost by a couple of hundred thousand quid, on the other hand, it might be worth spending quite a bit more time on it - and probably even some money on a good tax adviser... Gengulphus
gengulphus: Im glad you have mentioned the 3 part of bed and isa which is what im trying to solve I've looked on the hmrc app under isa, shares and cgt it does not mentioned what you have said about bed and isa being in 3 parts.... That's because "bed and ISA" is basically just the name of a package deal offered by some brokers: you ask your broker to do it and (assuming your broker offers "bed and ISA") you get its three parts (the sale outside the ISA, the ISA subscription and the purchase inside the ISA) as an agreed-once package from the broker. The same sort of thing as happens if you book a package holiday: the whole thing is agreed once, but has multiple parts (the flights, the hotel accommodation, the food, maybe some excursions, etc). The taxman won't in general have special rules for each part of such a deal: he'll just tax each part separately by the normal rules, which in the case of a bed-and-ISA are: * Sale outside the ISA: CGT might be due from the investor, according to the normal CGT rules. * Subscription to the ISA: No tax actually due, but the ISA provider will be required to report the subscription to HMRC. * Purchase inside the ISA: Stamp duty normally due, though it might not be (e.g. if the shares bought are AIM shares). The stamp duty is paid directly to HMRC by the broker, but the broker will pass the cost on to the investor via the contract note. So don't expect the taxman to have special rules about such package deals: he just taxes the separate parts normally. As another example, if your local supermarket has a "4 bottles for the price of 3" offer on beer, the taxman is still going to collect the excise duty on 4 bottles of beer: the fact that the supermarket is offering the 4 bottles for the price of 3 is simply a private offer the supermarket is making to its customers. Likewise, a "bed and ISA" is simply a private offer the broker is making to its customers. Unlike the supermarket offer, it's not offering the goods (i.e. shares) for free: the extra that it is typically offering the brokers' customers is typically just that the purchase will happen very soon after the sale, so that there is unlikely to be much change in the share price between them. And some brokers offer another extra: they'll only want a single commission for the package deal, rather than two separate commissions, one for the sale and the other for the purchase. But the taxman doesn't really care about those extras: as far as he is concerned, what has happened is three separate transactions: a sale outside an ISA, an ISA subscription and a purchase inside an ISA. Nothing more than that, nothing less. Just too clarify those three parts as I understand it it would be much simpler to just put cash in the stock isa than bed and isa and worry about the tax man... then you can buy and sell with in the isa all you want.. It would be simpler, yes, but it wouldn't do the same thing: it would only do the ISA subscription and the purchase within the ISA, not the sale outside the ISA as well. Whether that matters depends on whether you want all parts of the package deal... If you've actually got £15k of cash outside the ISA that's available for investment, you probably only want the ISA subscription and one or more purchases inside the ISA - which means that you might well not want the package deal. Whether you do depends on whether you want the gains or losses from the sale outside the ISA - you might want gains to use up your ISA allowance, or losses to offset gains in excess of the allowance - and on whether having to purchase the same share(s) inside the ISA as you sold outside it matters to you. If you do want the package deal, take the bed-and-ISA package; if you don't, don't: you can always put together the bits you do want yourself. For example, I recently wanted to shift some shares of mine into my ISA. But I wanted the gains on those shares to be realised in the 2014/2015 tax year, and I'd already used my ISA allowance for that tax year, so the ISA subscription would have to happen in the 2015/2016 tax year. Furthermore, I wanted to reduce the holding overall - i.e. I wanted to sell quite a few more shares outside the ISA than I wanted to repurchase inside it. So I didn't try to do a bed-and-ISA: as separate transactions, I sold outside the ISA on Thursday April 2nd to raise enough cash for the new year's ISA subscription, subscribed to the ISA on Wednesday April 8th, and split that subscription between three purchases on Tuesday April 14th (later than I'd planned, as the broker was unusually slow about processing the ISA subscription). That cost me a bit more than a bed-and-ISA would have done, both because of the extra broker commissions and because the price of the original share moved about 1% against me during the delay - but I reckon that was a price worth paying for ending up where I wanted and not somewhere else... As for the 3 part bed and isa lack of more detail info by hmrc on this is painful inadequate for PI's hence why im in here talking to you 1: is bed and isa exempt from being taxed while using the full £15,000 or No. I've told you in both of my previous replies that the sale part of the bed-and-ISA package is taxed by CGT just like any other sale outside a tax shelter, and now I've told you that again in this reply. I won't tell you it again after this - there's simply no point keeping on telling you if you're not going to believe me. 2: out of £15000, £11100 is exempt using cgt allowance while the remaining is taxed even though it is going into a bed and isa. So rather pay the tax its better to put the remaining as cash from a bank account savings or cash isa transfere savings to cut down on fees and unnecessary tax claims Closer, but still no. To deal with a minor point first, the ISA and CGT allowances this tax year are £15,240 and £11,100 respectively; last tax year they were £15,000 and £11,000. You're using a mixture of the two... Much more important, the money you raise from the 'sell outside the ISA' part of the bed-and-ISA is the proceeds of the sale (minus any selling costs) but CGT pays attention to the gain. They're not the same! As an example, suppose that in this tax year, you bed-and-ISA 1,000 shares and the sale part of that sells them at £15.25 each and pays your broker a £10 commission. It therefore neatly raises the £15,240 you can subscribe to the ISA (*). If the amount you originally paid for those 1,000 shares is £4,130 or more, you've realised a gain of £11,100 or less on them and so your CGT allowance will cover it. But if the amount you originally paid for them was less than £4,130, you've realised a gain of more than £11,100 and so some CGT will be due. And also much more important than the minor muddling up of the two tax years, any other gains and losses you realise in this tax year will change that position, and you're not necessarily in control of whether you realise them: takeovers and occasionally some other major corporate actions can force you to realise gains and losses that you don't want to. The upshot is that I cannot tell you how much the capital gain or loss will be from the sell part of a bed-and-ISA that puts £15,240 into your ISA: it could be any gain from £0 up to the full £15,240, or any loss at all, depending on what you originally paid for the shares (a gain of the full £15,240 is unlikely, but possible in at least a couple of circumstances). Nor can I tell you how much that gain can safely be without risking a CGT bill, because I don't know what other gains and losses you might have to realise this tax year. (*) Things seldom work out this neatly in real life, of course! ;-) Gengulphus
bagpuss67: thanks very much. now i see this CG56100 - Futures: financial futures: contracts for differences The term 'contract for differences' is not new. In its widest sense it refers to any derivative contract involving a cash payment, or series of cash payments, between the parties based on fluctuations in the value or price of property, or an index designated in the contract. It therefore encompasses many financial derivatives, including futures and options which can only be cash settled, as well as swaps. However the term has become associated with a particular type of contract (a "retail contract for differences") marketed, particularly to individual investors, alongside futures and options. Such a contract enables an investor to take a view on whether a share price, an index, or the value of an asset will go up or down. Typically, an investor enters into a contract for differences with a counter-party authorised under the Financial Services and Markets Act 2000, a derivatives broker. The investor may "go long" on the underlying asset or index, anticipating that its value will increase. In that case, he will receive a payment based on the increase in the value of the asset or index between his entering into the contract and closing out the contract. Contracts are commonly closed out by entering into an equal and opposite contract. Alternatively, if he thinks the value of the underlying asset or index is going to go down, he will "go short" in the contract, receiving payment based on the fall in value during the life of the contract. The investor will have to put up a deposit, commonly 20% of the value of the underlying asset, although it may range from about 5% to 35%. As the value of the underlying asset moves, he or she may be entitled to a refund of part of that deposit, or may have to increase it. In the case of contracts where the underlying asset is shares or a share index, the investor who goes long may also be entitled to receive a sum equivalent to any dividend payable on the shares (if they are the underlying asset) or on the shares that make up the index. This "dividend" will be netted off against the deposit. The derivatives broker who is the other party to the contract may also debit the account with a sum equivalent to the interest the investor would have to pay had he or she borrowed commercially to buy the shares. Thus an investor taking a long position on shares worth £100,000, and putting down a deposit of £20,000, will have to pay "interest" calculated on either the gross value of the position (£100,000) or the net value (£80,000), depending on the precise details of the contract. Retail contracts for differences enable investors to have the returns that would arise from holding shares without having to pay the full price for the shares (and without paying the dealing costs such as stamp duty reserve tax). An investor who "goes long" on shares has returns equivalent to those he or she would receive on a holding of the shares in question. An investor who goes short is producing the same results as if they were to enter into a contract to sell, at a future date, shares that they did not own, in the hope that the price would fall before completion of the sale, so that they could buy the shares that they had to deliver at a price lower than the agreed sale price. This means that the investor who takes a short position will be: credited with a payment equivalent to the "interest" they would receive had they sold shares and deposited the cash (the rate at which interest is credited on short positions is generally lower than that at which interest in charged on long positions), and debited with an amount representing the dividends they would forego by parting with the shares. Payments equivalent to interest that the investor makes or receives are not true interest. Similarly, no true dividends change hands. The amounts are instead entered into the capital gains computation. The investor should not show amounts received as investment income (interest or company dividends) on his or her return. And "interest" or "dividends" paid cannot be netted off against income. The final element that enters the computation is commission, which most brokers charge on contracts for differences. Retail contracts for differences are financial futures, and, unless the profits are taxable as trading income, in almost every case TCGA92/S143 charges the outcomes under the capital gains regime (CG56000+). SP03/02 gives guidance on when profits or losses are to be regarded as trading income. All debits and credits to the account, including commission and sums equivalent to interest and dividends, are brought within the computation of the net chargeable gain or allowable loss when the contract is closed out
gengulphus: I declared cgt share losses with HMRC in 2004/05 and have still to claim these. I anticipate making a profit in excess of the CGT allowance this year. Am I able to offset my prior losses from 2004/05? or is there a time limit to offset these? "Claiming" capital losses just means declaring them to HMRC, either in a tax return or in a stand-alone letter. So as long as you mean that and not for instance happening to mention the losses during a phone call, you have claimed them. Once losses have been claimed, there's no time limit on using them: they hang around until used or until your death cancels everything to do with your CGT. Note though that it's not your choice whether you use them: they get used when the CGT rules say they get used, even if you would prefer them not to be used. That means: * In the tax year in which the losses were realised (i.e. 2004/2005 in your case), they get used against gains realised in the same tax year if at all possible, and only start to be carried forward if there are no more same-year gains that you can use them against. (So normally, you only start to carry losses forward if you realise more losses than gains in a tax year.) * Losses that have been brought forward from earlier tax years get used against gains realised in a tax year if, after using any losses realised in that tax year (i.e. in accordance with the last bullet), the gains are above the CGT allowance for that tax year. If that happens, enough brought-forward losses are used to reduce the gains to the CGT allowance, or all the brought-forward losses are used if there aren't enough to reduce the gains to the CGT allowance. In the tax years before the 2008 CGT simplifications (i.e. the tax years 2005/2006, 2006/2007 and 2007/2008 in your case), that reduction of gains by brought-forward losses happened before applying taper relief. That could lead to losses having to be wasted offsetting gains when taper relief would have taken the gains below the CGT allowance anyway. Since the 2008 CGT simplifications, taper relief no longer exists and so that can no longer happen. So it's not completely automatic that losses realised in 2004/2005 and claimed within the time limit can be used now; they could potentially have been forced to be used in 2004/2005 or (less likely but possible) some of the tax years between then and now. But as long as they weren't, they're still around to be used - and indeed must be used if your net realised gains for the current tax year turn out to be above the CGT allowance, either to the extent of reducing those net realised gains to the CGT allowance or completely. Gengulphus
gengulphus: 1 Is it possible to give one's spouse £10600 worth of shares from a trading account? How does this work? Do you simply sell shares to that value and then transfer the cash and then buy back the shares in her account? Is this transfer neutral in terms of CGT? As david77 says, get the broker to transfer the shares from your account to your wife's account. That's very easy and straightforward if the two accounts are with the same broker, but can also be done if they are with different brokers. Details of how to do it are broker-dependent, so talk to the broker(s) about how to do it. The point of doing it as a gift (i.e. nothing taken or expected in return) is that transfers that are gifts between living individuals are exempt from stamp duty. To make full use of your spouse's CGT allowance, the gift should not be of £10,600 of shares, but of shares on which you have currently got a gain of £10,600. For instance, if the shares you give have tripled in price since you bought them, you want to give your spouse shares that you originally bought for £5,300 and that are now worth £15,900. The method works because of a special rule about inter-spouse transfers: regardless of what (if anything) the transferee pays the transferor for them, the CGT computation is done as though the transferee had paid the transferor the transferor's allowable costs. That means that the transferor disposes of the shares on the date of the transferor, for a gain/loss of his or her allowable costs minus his or her allowable costs, i.e. neither a gain nor a loss, and the transferee is subsequently treated as having acquired them for the transferor's allowable costs on the date of the transfer. So the one point I disagree with in david77's reply is the "original buy date and price" - it should be "transfer date and original buy price". (Back in the days of taper relief, it used to be that both the original buy date and the transfer date were relevant - the original buy date for taper relief purposes and the transfer date for buy/sell matching purposes - which could lead to some very messy situations! Fortunately, the relevance of the original buy date disappeared along with taper relief in April 2008, and now only the transfer date is relevant to the transferee.) Make the gift by a share transfer, not by selling the shares and giving the cash: the latter means that you realise the gain or loss yourself before the cash is transferred, rather than effectively transferring it along with the shares to your spouse. Note that the gain or loss realised by your spouse is determined by the share price when your spouse sells them, not by the share price when they were transferred. So don't expect to be able to determine the perfect number of shares to transfer - just get something close, and if the price rises so that the gain is more than the CGT allowance, either sell somewhat fewer than all the shares to realise a lower gain, or accept paying a little bit of CGT on the excess gain. Also note that because the gain is realised when your spouse sells, it's not enough to get the transfer done this tax year, you've also got to get your spouse's sale done this tax year. For the possible benefit of anyone else reading this: the special rule that makes all this work applies to civil partners as well as spouses. It does not apply in cases of legal separation, even when the spouses are not divorced and so still legally married (or the equivalent status for civil partners - I'm afraid I've forgotten the exact terminology). It also does not apply to 'partners' who are not in a legal marriage or civil partnership, no matter how long-established and secure their relationship. (Edit: for anyone confused by that last statement and MIATA's reply to Pedr01's question, the gift holdover relief described in the Helpsheet MIATA linked to is a different special rule to the one that applies to spouses and civil partners. It has a similar overall effect, though achieved in a somewhat different way technically, and it mainly depends on what the gift is rater than who it is given to. For gifts of shares, the shares have got to be shares in a trading company that counts as unlisted - and yes, that means that if AIM shares are made ISA-eligible by the simple technique of making them all count as listed, none of them will be eligible for gift holdover relief any longer...) 2 If over the course of a year, one made say 20 share transactions, is it the case that it is simply the overall profit that cannot exceed £10600 without incurring CGT? Yes in all normal circumstances. But beware: there are cases when the overall profit doesn't exceed £10,600 and you've still got to account for CGT to the taxman. That accounting will produce an answer of £0 CGT owing, but it's still got to be done. The main cases where that happens are: A) If you want to make some CGT-related claim or election, because if you don't actually make the claim or election, you don't get it! B) If the gains you've made on your profitable transactions are over £10,600 and need the losses on the loss-making transactions to bring the overall profit back below £10,600. This is really a special case of A) above, because there's a rule that the losses cannot be offset against the gains unless the losses have been claimed - so you need to make claims to get your CGT bill down to £0. C) If the total "disposal proceeds" of your sales and other disposals are above £42,400 (four times the CGT allowance). The disposal proceeds of a sale are the raw price paid for the shares (or other asset) before deducting any selling expenses. For example, if you sell 1,000 shares at 200p each, paying your broker a £10 commission, the disposal proceeds are £2,000, not £1,990. The disposal proceeds of other disposals are determined similarly - for instance, on a gift transfer to your wife, your disposal proceeds are the total of your allowable costs. If you're asked to fill in a tax return, you have to account for CGT in it in any of those three cases (and a couple of other ones relating to non-domicile that I cannot remember offhand) because the instructions for filling in a tax return say you do. If you're not asked to fill in a tax return, you need to communicate with the taxman to tell him the situation in cases A) and B) for the reasons explained in those cases - and he will probably respond by asking you to fill in a tax return. In case C), however, I'm not aware of any reason why you need to communicate with the taxman about your CGT unless he asks you to fill in a tax return or one of the other cases also applies. Finally, I say "in all normal circumstances" in the first paragraph of this section of the reply because there are some cases where a loss becomes 'clogged', meaning that it is only allowed to be used against some specific types of gain. The standard example is if you realise a loss on a disposal of an asset to a 'connected person' such as a close family member or a business partner: such losses can only be used against gains realised on disposals to the same connected person. If your overall gain is made up of £15k gains and £5k losses, so is £10k and under the CGT allowance, you normally offset the £5k losses against the £15k gains, leaving you with gains below the CGT allowance and so no CGT to pay. But if the £5k losses are 'clogged' and cannot be offset against any of the £15k gains, the CGT allowance only deals with £10,600 of those £15k gains, leaving you with CGT to pay on £4,400 of gains. So it is possible to end up with CGT to pay on overall profits under the CGT allowance - but it's distinctly unusual and requires special circumstances. 3 When will the 2013/14 CGT allowance be known and also the 2013/14 ISA allowance? If the normal pattern is followed, I believe the 2013/2014 CGT allowance will be announced in the Budget later this month. If it rises in line with CPI as it is normally supposed to, the estimated figure I have seen is £11,000 - but I wouldn't be surprised if the Budget overruled that to freeze it at £10,600 again. The 2013/2014 ISA allowance is already known to be £11,520 - see . It could presumably still be changed at the last minute in the Budget, but I wouldn't expect it to be. Gengulphus
gengulphus: bobdobalina, Each of you has a £10,600 CGT allowance this tax year - i.e. each of you can make that big an overall capital profit this tax year without any CGT being payable. If you make more than that, you will be taxed on the excess over the allowance. The rate at which each of you is taxed depends on their Income Tax situation. Your wife's earnings of £140 per week is a bit over £7,000 per year, and she has an Income Tax personal allowance of £8,105 this tax year (assuming she is under 65 - it's more if she is 65 or more). If her taxable income (i.e. not just earnings, but also interest, dividends, etc, excluding untaxable stuff like interest on cash ISAs) is also below her personal allowance, then she can get up to £34,370 worth of capital profits in excess of the CGT allowance taxed at 18%, then any further profits beyond that are taxed at 28%. That figure of £34,370 is her completely-unused Income Tax basic-rate band. If her taxable income is above the £8,105 personal allowance, it gets reduced on a pound-for-pound basis. For example, if her taxable income were £9,000, then she would use £9,000 - £8,105 = £895 of her basic-rate band on income, and so she would only be able to get £34,370 - £895 = £33,475 of capital gains in excess of the CGT allowance taxed at 18% before moving on to 28%. If her taxable income is below the £8,105 personal allowance, by the way, the unused part of her personal allowance cannot be used to save her CGT in any way. All of those rules also apply to you, but I assume from the fact that you don't also say that your income is low that the amount of excess capital gains you can get taxed at 18% rather than 28% is lower, or even zero if you're a higher-rate taxpayer and so don't have any unused basic-rate band. So in the absence of the further measures I'll describe below and assuming your wife's taxable income is below her personal allowance or not much above it, the best you could do on a sale this tax year that produced a gain of £50,000 would be to keep £10,600/£50,000 = 21.2% of the shares yourself and transfer the remaining 78.8% of them to your wife, then each of you sell. (The order is important: when you sell, the capital gain becomes 'attached' to the owner of the shares at the time (or half to each of you if they're in a joint account when sold) and cannot afterwards be transferred between you.) That would result in you having a £10,600 gain, covered completely by your CGT allowance, and your wife having a £39,400 gain, of which £28,800 would be in excess of her CGT allowance. That excess capital gain would be within her unused basic-rate band, so would all be taxed at 18%, resulting in a CGT bill of 18% * £28,800 = £5,184 for her. Now for the further measures. The most obvious one is that if you can split the sale between tax years and are willing to take the risk of the share price falling, you can each use both this year's allowance and next year's. E.g. if the 2013/2014 tax year's CGT allowance and rates are the same as this year's (which I don't think is known yet), you could transfer enough shares to your wife now for her to sell for a £10,600 gain and sell the same number yourself, and both gains would be within the CGT allowance, so no CGT bills for this tax year. Then on or after April 6th, you could keep enough shares to realise another £10,600 gain yourself, while transferring the rest to your wife for her to sell. If the share price were unchanged by that point, you would still end up making £50,000 gains, but four lots of £10,600 gains would be untaxed, and so your wife would end up paying 18% on only the remaining £7,600 of capital gains, for a £1,368 CGT bill. (Or you could even wait a further year to sell the shares that produce that last £7,600 of capital gains, which would make the 2014/2015 tax year's CGT allowances usable as well and so eliminate the CGT bill entirely - unless of course the share price rises steeply and so increases the gain further, but having to pay CGT because of that would beva very nice problem to have!) The other thing to mention is other capital gains and losses. If you've already made other capital gains this tax year, they'll increase the amount of capital gains you have to deal with, and similarly, if you've already made capital losses this tax year, they'll decrease the amount of capital gains you have to deal with. Again, that applies equally to any gains or losses your wife has already made this tax year - and as with already-realised gains, you cannot transfer already-realised losses between you. You might also have the opportunity to make further gains and losses this tax year. Making further gains is not going to help your CGT situation, so avoid doing so unless there is a good investment case for doing so (but if there is such a case, sell snd pay the extra CGT: there's an old saying "never let the tax tail wag the investment dog" for such situations!). But making further losses could be very helpful - for example, if you happen to have a Lloyds holding bought several years back for £5,000 and it's now worth £500, then selling it for a £4,500 loss would allow you to transfer fewer shares to your wife and make a £4,500 greater gain (i.e. £15,100 rather than £10,600) yourself. That would reduce the gain made by your wife by £4,500, which would reduce her CGT bill by 18% * £4,500 = £810 - unless of course it had already been reduced to zero by being split over three tax years. You might also be able to use losses made in past tax years and carried forward to the current tax year. That will be the case for a past tax year if all of the following three conditions are true: * The first condition is that you made more losses than gains in that tax year - if so, the excess of the losses over the gains can be carried forward. That's because losses have to be used against gains made in the same tax year if at all possible: the only way for losses to start being carried forward is if they cannot be used against any gain - and the only normal way that happens is if the gains have all been used up. * The second ondition is that you 'claim' the losses by telling the taxman about them within a time limit. That time limit is now the end of the 4th tax year after the tax year in which you made the losses, so if you made the losses before the 2008/2009 tax year, you're now out of luck (unless they were made much earlier - there's a cut-off date in the 1990s before which this rule about 'claiming' the losses doesn't apply). And if you made the losses in the 2008/2009 tax year, get your skates on: you only have until April 5th to tell the taxman about them. I should say that I'm assuming you haven't already 'claimed' the losses. If you have, then as long as it was done within the time limit for the tax year concerned, they'll then remain available for use until actually used. * The third condition is that the carried-forward losses haven't already been used up by an intermediate tax year. Using them up will only happen if the gains for that tax year were in excess of the losses for that tax year plus the CGT allowance for that tax year, and only to the extent of that excess. If all three of those conditions are the case, you will probably be able to use the carried-forward losses. Otherwise, don't bother! Finally, just in case of any bright ideas about having other family members you could transfer shares to and get to sell the shares using their CGT allowances: as a general rule, that doesn't work, because the technique relies on a special rule for transfers between spouses and civil partners. If you try it with others, the transfer itself makes you liable to CGT. There is however another special rule that has a similar effect, called gift holdover relief. It only works on gifts - i.e. you mustn't be expecting anything in return - and it only works on 'unlisted' shares in trading companies (i.e. not investment companies, property companies, etc). Quite a few AIM shares qualify for it, because being on AIM doesn't make a share count as 'listed' - but if the company is also on another stock exchange, that might well make it count as 'listed'. So a somewhat tricky one to use, and having to be a gift might well make it of no interest anyway, but it seems worth mentioning. If it is of interest, see for details. Gengulphus
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