Capital Gearing Share Discussion Threads

[panshanger1] 12/10/2020 09:43

Love this trust Great core holding for wealth preservation ( alongside Personal Assets)Need to keep Peter Spiller going

[thamestrader] 23/9/2020 20:30

Thanks Gen. for your very comprehensive and well considered thoughts. Boris has today announced the cancellation of the Autumn statement/budget, so it looks like nothing will change anytime soon. In my case, this means no tax-related reason to rush to crystallise further gains this tax year. There might be other reasons, however: better to pay tax on a gain while i still have one, than to have no gains to pay tax on following a market crash.

[gengulphus] 23/9/2020 18:00

Does anyone else out there think CGT might be an easy target for the chancellor in his quest to fill the financial black hole caused by Covid? I don't. A target, quite possibly - but not an easy target... It's not easy because to a large extent, CGT is a voluntary tax - make changes designed to raise more CGT from investors, and investors are likely to respond by changing their strategies to be more likely to hold on to investments carrying a large unrealised capital gain rather than selling them and realising the gain... Doing that won't always be possible - sometimes people need the cash or the sale is compulsory for one reason or another - but I suspect there will be plenty who shift to a long-term buy & hold strategy if CGT becomes a serious burden... Also, the investors most likely to want not to do that are those who use shorter-term 'trading' strategies. But many of them will have bought their shares last year and so will be sitting on plenty of unrealised losses, not gains... He might remove the £12300 allowance, he might increase rates, he might do both. Removing the CGT allowance strikes me as very unlikely, at least as things stand. Why? Because then everybody who makes even a small capital gain becomes liable to account for CGT, either in a tax return or using some sort of adjustment to their tax code - but that adjustment is likely to change every year, in a hard-to-predict way, so would require some sort of annual return from the taxpayer anyway. Either way, there would be a big increase in the number of CGT returns HMRC would need to process, quite often for very small amounts of tax collected - so removing the CGT allowance entirely would probably not be cost-effective because of high collection costs relative to the amount of tax collected. And in addition, it would also have high political costs for the government - a CGT return is a distinctly user-unfriendly bit of bureaucracy and making large numbers of voters do them who hadn't had to before is likely to alienate a considerable number of voters! That said, I do think reducing the CGT allowance might be an option for the Chancellor. E.g. halving it rather than removing it entirely would affect far fewer taxpayers and would tend to be focussed on those with the largest capital gains among those who currently don't pay CGT, as well as producing a substantial increase in CGT collected from those who do currently pay CGT. That's more likely to be cost-effective from the Chancellor's point of view, both with regard to collection costs and political costs. And increasing CGT rates is also an option. But both reducing the allowance and increasing rates are going to be limited in terms of how much they're likely to raise, due to the 'largely a voluntary tax' nature of CGT mentioned above. Various parts of that assume that the structure of CGT and collecting it remain largely as they are at present, and there are possibilities available for more fundamental revisions of CGT that would change the argument. For instance, brokers cannot currently give definitive statements about what capital gains and losses have been realised by sales in a broker account they provide, because if the accountholder has other holdings of a share (either certificated or held with another broker), CGT rules require the capital gains and losses to be calculated from the merged transaction record for all the holdings, not separately for each holding and the results added together. If CGT were revised to work on a 'separately on each holding and add together' basis, it would become possible for brokers to produce definitive CGT statements, and therefore for the government to require them to do so. And if that were done, CGT returns by individual taxpayers could become just a matter of taking the figures from each broker they use and adding them up - much as they handle dividends at present. That would be likely to reduce the costs significantly, both collection costs and political costs. Another example of a fundamental revision that might be attractive to the Chancellor is finding some way to tax all gains, whether realised or not (though the attractiveness of that might not be all that high at present, given recent losses...). But both of these fundamental revisions have a whole mass of practical detail to be designed - for example, how are transfers from one broker to another handled? how are certificated holdings handled? what happens if someone has big unrealised gains on shares that for some reason they cannot sell? and many others... So while fundamental reform of the CGT system might be a way for the Chancellor to effectively target CGT as a source of significant extra tax revenues, I'm pretty sure it's not an easy way for him to do so. Gengulphus

[panshanger1] 11/9/2020 15:50

All quiet here New ATH in this quality trust

[zangdook] 03/9/2020 07:15

There was a rumour that he was going to hit CGT, I seem to recall. Fortunately I have assembled a pack of dogs with vast unrealised losses waiting to be used if necessary. What foresight! Warren Buffett eat your heart out!

[thamestrader] 03/9/2020 06:45

Does anyone else out there think CGT might be an easy target for the chancellor in his quest to fill the financial black hole caused by Covid? He might remove the £12300 allowance, he might increase rates, he might do both. The autumn statement seems the most likely time for an announcement, with the new regime starting in April 2021. Although I have already used this year's allowance, I might sell more assets, as paying 10% (or even 20%) in 20/21 might be better than leaving it until 21/22. Added to which, the announcement of big tax increases might itself cause the markets to fall. Any thoughts?

[jeffian] 15/7/2020 17:54

Gengulphus, I rudely didn't thank you for your #1152 but as the thread drifted off the radar, I rather forgot about it. I've just read your comments now and thank you for them. As my wife's holding stemmed from a family company holding going back to the 1960s/70s, the inflationary element was quite large so one winces slightly that such gains then get taxed. Having said that, as the amount was quite large, I've stopped sharing this story with friends as the most common reaction was "You should be so lucky"!!

[gengulphus] 15/7/2020 17:31

azalea, If I do not exceed my annual Capital Gains tax allowance, do I still have to declare to HMRC the number of shares I have bought and sold in the tax year? If HMRC require you to fill in a tax return, the instructions for doing so are in https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/874084/SA150_English_Notes.pdf - that's the version that accompanies the paper tax return because I cannot give any equivalent link for the online tax return. The rules for the two types of tax return are essentially the same, though, so it does give you the answer about whether you should fill in the capital gains part of the online tax return: "7 Capital gains summary Fill in the ‘Capital gains summary’ pages and attach your computations if: • you sold or disposed of chargeable assets which were worth more than £48,000 • your chargeable gains before taking off any losses were more than £12,000 • you want to claim an allowable capital loss or make a capital gains claim or election for the year • you were not domiciled in the UK and are claiming to pay tax on your foreign gains on the remittance basis • you’re chargeable on the remittance basis and have remitted foreign chargeable gains of an earlier year • you sold or disposed of an interest in UK land or property and were not resident in the UK or you were a UK resident and overseas during the disposal • you submitted a Real Time Transaction return on the disposal of an asset and have not paid the full amount of Capital Gains Tax" The first three of those are the important ones for most people (the next three are only important for those with complications due to foreign residence, domicile, etc, and the last is something I've never come across). Together, they mean that in order to avoid having to fill in the Capital Gains part of the tax return, the total proceeds of your sales must be at most four times the CGT allowance and the total gains of your profitable sales (i.e. without offsetting the losses of your loss-making sales) must be at most the CGT allowance. For the first of those, the proceeds of a sale are the number of shares sold times the price obtained per share, without deducting broker commission or any other incidental costs - so a bit more than the final amount credited to your account for the sale. So you can be required to fill in the Capital Gains part of a tax return even though you don't have any CGT to pay, and since filling it in also requires you to submit your CGT computations, yes, you can be required to give numbers of shares sold along with other details of the sales, as well as similar details of the purchases of those shares (which could be in either the same tax year or in previous tax years, and can even be in the following tax year in some cases where the '30 day rule' is involved). There are basically three situations in which you have no CGT to pay but have to fill in the Capital Gains part of a tax return, or want to: A) Your total proceeds from sales for a tax year exceed four times the CGT allowance but your total gains (without offsetting losses) from the profitable sales are under the CGT allowance. B) Your total gains (without offsetting losses) from the sales for a tax year are over the CGT allowance, but you have enough losses (or other claims or elections) from those sales to be able to offset them to below the CGT allowance and so pay no CGT. C) Your losses from the sales for a tax year are greater than your gains from those sales, so you can offset all the gains and still have losses remaining. In situations A) and B), you have to fill in the Capital Gains part of the tax return if you're asked to submit one. In situation C), you're not obliged to fill it in, but you probably want to, because you can carry the net losses remaining after offsetting all the gains forward to future tax years, and they will eventually save you CGT unless you die before the opportunity for them to do so arises. (I should add that the rules for using losses brought forward from earlier tax years are a bit more generous than those for losses from sales in the same tax year: they don't have to be used offsetting gains that are already under the CGT allowance.) That leaves the case that HMRC haven't required you to submit a tax return. In that case, you're not legally required to submit one immediately, but you do have to check whether you have Income Tax and/or CGT to pay for the tax year, and if so, to notify HMRC of that situation ( https://www.gov.uk/hmrc-internal-manuals/self-assessment-legal-framework/salf210 ). HMRC are able to react to such a notification in various ways, but one reasonably likely one is that they'll require you to submit a tax return. In situation A), you don't have CGT to pay, so unless you have Income Tax to pay, AFAIAA you're not obliged to do anything if HMRC don't require you to submit a tax return. Situation B) is trickier. The issue is that you need to offset losses in order to have no CGT to pay, but you have to 'claim' a loss by telling HMRC about it to be able to use it to offset gains. So one way or another you need to tell HMRC the details of the losses, and it's at least reasonably likely that that will eventually lead to HMRC requiring you to submit a tax return. Situation C) is again a case of wanting to tell HMRC about the situation in order to 'claim' the losses concerned. There's a time limit on doing so: a loss that hasn't been 'claimed' by 4 years after the end of the tax year in which the sale happened can no longer be 'claimed'. So there's no immediate need to inform HMRC of the details, but there is a need to do so eventually (note that once 'claimed', there's no deadline for actually using the loss to offset gains, other than your death). Gengulphus

[azalea] 21/6/2020 15:38

If I do not exceed my annual Capital Gains tax allowance, do I still have to declare to HMRC the number of shares I have bought and sold in the tax year?

[gengulphus] 14/6/2020 13:49

stasper, My daughter decided in May 2019 to invest an amount of 44,000 GBP into an Interactive Brokers margin account and, on my advice, has been dealing exclusively in US listed stocks. During the tax year 2019-2020 there were around 200 positions opened and closed. Because of the stock market crash in February, there is an estimated net loss of 4,000 GBP which she intends to report in her tax return. I am now trying to help her with her CGT, and we are both finding the situation quite complicated. Fortunately, we found excellent advice in this forum, for which I am grateful to the members and especially to you, Gengulphus. At this point, and having read the relevant posts, I think I understand pretty well the part which has to do with the disposal of the stocks themselves, including the same day and the 30 days rule. I have familiarized myself with the standard calculators and I am pretty confident that I did this part of the calculation correctly. And then comes the acquisition and disposal of the US currency during the buy and sell transactions. I read very carefully the excellent example posted by Gengulphus 8 years ago (on 28 Feb 2012). ... Not a major problem, but for future reference it's much easier for readers to locate a past post if you give its number (236 in this case) than if you give its date. And even easier if you give a direct link to it (https://uk.advfn.com/cmn/fbb/thread.php3?id=24977116&from=236 in this case). ... However, I still have questions: 1) I have the problem of applying the suggestions in the post to a MARGIN account. With a margin account, purchasing shares does not reduce the already existing capital, but is done on borrowed capital, and there I cannot see how to apply Gengulphus's suggestions. Can you please help? My feeling is that a margin account is equivalent to a non-margin account plus a loan facility, and will be taxed accordingly. And I suspect that a foreign-currency loan facility won't be taxed by CGT because every time you draw down on it, you're acquiring a matching asset (the foreign currency) and liability (the obligation to repay it). But I'm way out of my depth here, so don't take any of that as an answer to your question - it's at most a suggestion that might indicate where the answer lies, and equally might not. And equally, please do note that my old post number 236 that you mention indicates in several places that I wasn't at all certain about what I was saying! About the only things I feel I can say with reasonable certainty is that if faced with a similar problem, I would (a) find and employ a tax accountant to do the job for me, at least for one year to pick up how it should be done; (b) think very hard about whether I really wanted all the CGT hassle created by trading foreign shares frequently in an unsheltered account! (Personally, I wouldn't want to trade foreign shares frequently at all - but if I did want to do it, I would make certain I did it in an ISA or SIPP...) 2) There are about 200 individual sales of stocks during the tax year. Supposing that we solve the problem of how to deal with the foreign currency, I guess there will be an equal number of disposals of foreign currency, resulting in more than 400 total disposals. Am I correct in this? ... Sorry, but I have nothing to add to what I said in my old post number 236, including still being just as uncertain about all the uncertainties I expressed in it. Basically, I've had very little experience of CGT on foreign shares in the last eight years since it was posted, and that little was just a handful of very straightforward cases. ... And with each disposal having an average value of 8,000 GBP, we would have to report a figure of around 3,200,000 GBP for the total proceeds. All this from an account which started with 44,000 GBP and ended up with 40,000 GBP. Won't this look strange to HMRC or are they used to encountering such large numbers from moderate sized accounts? I would think there are enough people trying to make money on the stockmarket by short-term trading rather than longer-term investing that they'll be used to disposals being a large multiple of the account value. A factor of 80 is probably towards the high end, but I doubt that it's anywhere near the largest they've encountered! Gengulphus

[gengulphus] 14/6/2020 12:48

jeffian, I have just had a rather unpleasant shock, although this may come as no surprise to the thread experts. My wife held shares in a family company from way before 1982. That company was taken over in 1998 for shares and cash and the acquiring company has itself now been taken over in a cash-only bid. We had constructed a spreadsheet in 1998 to establish the base cost of the shares, starting with the known March 1982 value and adjusting for various transactions - additions, disposals, Rights issues and so on - including, of course, indexation. I am aware that indexation was frozen at 1998 and removed in 2008 but, having had the calculations back from my accountant, I wasn't aware that the indexation element of the 1998 cost was actually withdrawn and the base cost for CGT purposes goes back to the cost of the original holding. This smacks of retrospective taxation, surely? This change took effect in April 2008, as part of a package of CGT simplifications that came into effect then. Basically, that package almost entirely (*) got rid of indexation and taper relief, and reduced the CGT rates from the individual's marginal Income Tax rate to the current 10% up to one's unused basic-rate Income Tax band, 20% above that (a few years later, an extra 8% was added to both of those rates if the asset is residential property, and that remains the case today). So basically, the simplifications increased gains by removing the inflation/long-holding-period increments to base cost provided by indexation and taper relief, but reduced the rates at which the gains were taxed. IIRC, the government of the time justified this with the argument that overall, the increase and the decrease roughly balanced out, so that there was little overall effect on CGT raised, and so they weren't retrospectively raising more tax... But as far as individuals are concerned, yes, those changes in 2008 acted retrospectively, and the effects were definitely not guaranteed to cancel out: typically, someone who made massive gains over a period of less than three years benefited greatly from the rate cuts and wouldn't anything to lose from the abolition of indexation and taper relief (unless they could count the asset as a 'business asset'). Whereas someone who made modest, roughly inflation-equalling gains over many years might well have had gains before 1998 cancelled out by indexation and gains after 1998 reduced to below the CGT allowance, for no CGT to pay before the changes, and have found themselves liable to CGT on a gain that exceeded the CGT allowance after it... (It does incidentally seem particularly perverse that a Labour government made tax changes that benefited speculators who got rich quick and penalised steady long-term investors!) Anyway, people did make a bit of a fuss about the retrospective-taxation aspect of the changes back then in 2007-8 when they were proposed and enacted, but they didn't get anywhere. So I'm pretty certain there's no mileage in pursuing that angle now. And as far as the shock you've received is concerned, you might be able to reduce it by looking at what your CGT bill would have been if you did still have the indexation to reduce the gains up to 1998, but had to pay CGT at your marginal Income Tax rate rather than at the 10%/20% rates. No guarantees, though: as I indicate above, that exercise produces widely varying results for different individuals. (*) There is a case in which indexation can still affect calculations of capital gains and losses - IIRC it's when an asset was transferred between spouses before the simplifications came into effect: the indexation got 'frozen' into the transferee spouse's base cost at the time of the transfer, and that doesn't get retrospectively reversed. (But if this situation does apply to anyone, just take it as an indication that you need to check the exact rules, because I am not certain I remember the treatment accurately!) Gengulphus

[jeffian] 22/5/2020 12:24

I have just had a rather unpleasant shock, although this may come as no surprise to the thread experts. My wife held shares in a family company from way before 1982. That company was taken over in 1998 for shares and cash and the acquiring company has itself now been taken over in a cash-only bid. We had constructed a spreadsheet in 1998 to establish the base cost of the shares, starting with the known March 1982 value and adjusting for various transactions - additions, disposals, Rights issues and so on - including, of course, indexation. I am aware that indexation was frozen at 1998 and removed in 2008 but, having had the calculations back from my accountant, I wasn't aware that the indexation element of the 1998 cost was actually withdrawn and the base cost for CGT purposes goes back to the cost of the original holding. This smacks of retrospective taxation, surely?

[stasper] 21/5/2020 08:19

zangdook, no, it is not a spread betting account. It only deals in stocks. In fact, it is quite a standard margin account that almost any broker will provide.

[zangdook] 21/5/2020 07:48

This may be completely irrelevant, but if the margin account is a spread-betting account, as I understand it it's not taxed the same way as regular share dealing. I don't know enough to go any further.

[orchestralis] 21/5/2020 06:26

It all sounds a far to complicated way of making money

[stasper] 21/5/2020 06:15

Update: As I thought, I didn't get any useful help from Interactive Brokers. Their tax infrastructure is US oriented. In the meantime, it has dawned upon me that with a margin account, when you buy a share registered in the US on margin, you borrow the USD needed, so effectively you sell USD short. Ergo, the computation of foreign currency gains and losses includes (maybe quite heavy) short selling of USD. So, with margin accounts in foreign currency, what is really needed is a CGT calculator that can deal with short selling. In my case, a possible complication is that in the end of the tax year I still have open short positions in USD. Standard calculators do not deal with short selling and I don't know how to treat unmatched open short positions. Any help around? Gengulphus perhaps?

[picardy] 18/5/2020 20:04

Gengulphus - thank you so much for your answers and example computation. Much appreciated!

[stasper] 17/5/2020 13:08

Orchestralis, thank you very much for your suggestion. I will ask Interactive Brokers, but I don't expect much from them. They have lots of info about US tax on their site, but not about UK CGT. But if anyone here has a margin account with them and has faced the problem before, please share your experience. The following site hxxps://timetotrade.eu/cgt_uk.php provides an application that claims it can handle CGT for foreign stocks, including currency variations, but you have to open a pro trading account with them at a steady cost of 50 GBP per month just to get access at the calculator... and I am not sure it can handle margin accounts, so this is out of the question. On the other hand, calculators like CGTcalculator can handle the stock disposal part if you feed them with the acquisition and disposal prices in GBP (doing the conversion yourself using the prevailing exchange rates at the time of acquisition and disposal), but can't handle the currency acquisition and disposal part, as far as I can see. If anyone knows of an appropriate calculator that can do the job, they are most welcome.

[orchestralis] 16/5/2020 15:29

I would seek some advice from the interactive broker. Surely they have reports/tools that can calculate the cgt. This can't just be affecting you.

[stasper] 16/5/2020 15:17

My daughter decided in May 2019 to invest an amount of 44,000 GBP into an Interactive Brokers margin account and, on my advice, has been dealing exclusively in US listed stocks. During the tax year 2019-2020 there were around 200 positions opened and closed. Because of the stock market crash in February, there is an estimated net loss of 4,000 GBP which she intends to report in her tax return. I am now trying to help her with her CGT, and we are both finding the situation quite complicated. Fortunately, we found excellent advice in this forum, for which I am grateful to the members and especially to you, Gengulphus. At this point, and having read the relevant posts, I think I understand pretty well the part which has to do with the disposal of the stocks themselves, including the same day and the 30 days rule. I have familiarized myself with the standard calculators and I am pretty confident that I did this part of the calculation correctly. And then comes the acquisition and disposal of the US currency during the buy and sell transactions. I read very carefully the excellent example posted by Gengulphus 8 years ago (on 28 Feb 2012). However, I still have questions: 1) I have the problem of applying the suggestions in the post to a MARGIN account. With a margin account, purchasing shares does not reduce the already existing capital, but is done on borrowed capital, and there I cannot see how to apply Gengulphus's suggestions. Can you please help? 2) There are about 200 individual sales of stocks during the tax year. Supposing that we solve the problem of how to deal with the foreign currency, I guess there will be an equal number of disposals of foreign currency, resulting in more than 400 total disposals. Am I correct in this? And with each disposal having an average value of 8,000 GBP, we would have to report a figure of around 3,200,000 GBP for the total proceeds. All this from an account which started with 44,000 GBP and ended up with 40,000 GBP. Won't this look strange to HMRC or are they used to encountering such large numbers from moderate sized accounts? I would appreciate any help I can get, especially on the first question, but also some insight on the second one. Thank you.

[zangdook] 12/5/2020 08:29

Thanks for the reply. In fact it was 1p for the whole shareholding, not per share. The transfer was made well after the 30-day limit, as they were not paying attention. However, I shall probably not pursue it (at present) because the aggravation of dealing with sleepy and unhelpful stockbrokers outweighs the small danger that any eventual returns will push me far into CGT territory.

[gengulphus] 12/5/2020 07:38

zangdook, That reminds me of something which happened to me a couple of years ago: A company in my ISA was delisted and its shares were transferred out to my non-ISA account, and the broker simply listed the entire shareholding at a purchase cost of 1p (without explanation - when I queried it they asked me "what price do you want us to put?"). Is that correct practice when a delisted company is de-ISAed, or would the cost be the closing price on the last day of listing, or something else? I doubt there's been any sort of regular trade in the shares since delisting. I don't know exactly how the delisted company is supposed to be valued in those circumstances. But what I do know is the following link: https://www.gov.uk/guidance/how-to-manage-an-isa-investment-fund#withdrawals-investments-stocks-shares-lifetime It starts: "On the transfer to an investor of an investment, the manager must provide the investor with details in writing of the market value of the investment as at the date of withdrawal." and it goes on to give some details of how the ISA manager should determine that market value in various circumstances. I.e. it's the ISA manager's responsibility to determine the market value as at the date of withdrawal and to tell you what it is - not your responsibility to tell the ISA manager what it is! So their "what price do you want us to put?" rather smacks of them shirking their job... However, I should also note the following link: https://www.gov.uk/guidance/stocks-and-shares-investments-for-isa-managers#changes-to-investments-held-in-a-stocks-and-shares-isa A few paragraphs in, it says: "Where the new investments are not qualifying investments, managers must, within 30 calendar days of the date on which they became non-qualifying investments, either: * sell them (in which case the proceeds can remain in the stocks and shares ISA) * transfer them to the investor to be held outside the ISA." The point that strikes me about that is that the date of the transfer out is up to 30 days after the delisting. So it can have happened on a date when there was no longer any market for the shares, and I would guess it almost certainly did. That obviously makes the market value of the shares much harder to determine - though it will probably be considerably lower than the last market price before the shares were delisted simply as a result of unlisted shares being much harder to market. So assuming you've been given the figure of 1p/share in writing (which I believe covers emailed documents as well as those printed on paper), the way I would treat the situation depends on whether that seems at all realistic as a share valuation, bearing in mind the fact that as an unlisted share, its valuation could be several times less than it was as a listed share. If it does, I would simply use it, make certain that I keep that valuation among my records so that if HMRC question it, you have evidence that that's the valuation the ISA manager gave you. If it doesn't seem to be a realistic valuation, then I would be inclined to raise the question again with the ISA manager, pointing out that HMRC say the obligation to provide it is on them, not you - and be prepared to raise the issue to a formal complaint or even to the Financial Ombudsman if they refuse. But I say that I would be inclined to do that, not that I would definitely do it, because even if 1p/share is clearly far too low (making the eventual gain and the CGT payable too high), the amount of money involved might not be worth the potential hassle. That depends on the number of shares involved, how big the undervaluation is, and how much money you feel is worth making a fuss about - not matters I can judge for you! Gengulphus

[zangdook] 01/5/2020 12:48

That reminds me of something which happened to me a couple of years ago: A company in my ISA was delisted and its shares were transferred out to my non-ISA account, and the broker simply listed the entire shareholding at a purchase cost of 1p (without explanation - when I queried it they asked me "what price do you want us to put?"). Is that correct practice when a delisted company is de-ISAed, or would the cost be the closing price on the last day of listing, or something else? I doubt there's been any sort of regular trade in the shares since delisting. The company, ERET, is being liquidated, albeit rather slowly, and there may be some return when the liquidation is finished.

[gengulphus] 30/4/2020 19:11

Yes, indeed. Shares held in SIPPs and ISAs are effectively invisible to CGT, so when shares are taken out of an ISA (either compulsorily if they've ceased to be eligible for holding in an ISA, or because the ISA holder has voluntarily withdrawn them) they effectively pop into existence in the ISA holder's possession as far as CGT is concerned. CGT treats that as an acquisition at market value on the date they come out of the ISA (*), and any loss between then and any subsequent disposal can be claimed, including ones that are deemed to have been realised because of a negligible value claim. Note that one of the conditions for a negligible value claim to be valid is that the shares must have become of negligible value during your period of ownership - i.e. they've got to have been of non-negligible value when they came out of the ISA and subsequently become of negligible value. And ISA managers aren't supposed to immediately remove shares from ISAs is they've ceased to be eligible for holding in an ISA, but to give the ISA holder a period (30 days IIRC) to decide what should be done with them. So exactly what can be done with negligible value claims may well depend on exactly what happened and when. (*) By the way, ISA managers are supposed to tell the ISA holder at the time what that value is - so if anyone has had that happen to them and not already had the market value on the date of withdrawal from their ISA manager, ask for it! David (aka Gengulphus)