Capital Gearing Share Discussion Threads

[brancho] 09/6/2012 17:08

Thanks MIATA

[miata] 09/6/2012 16:18

Alt 63 produces a ?

HMRC has a lot of staff who are under pressure and don't always give the right answers, I assume they treated your schedules as an attempt to AMEND your tax returns. After twelve months months from 31 January after the end of the tax year you cannot AMEND your tax return unless you wish to admit to mistakes, if you do you have to write to HMRC and tell them about the mistakes and make a claim that you've paid too much tax, giving evidence of the tax you have overpaid.

If you just want to claim the capital losses for use in future years, again send them a letter setting out your claim. Visit your local tax office if you want faster action.

[brancho] 09/6/2012 16:00

Can anyone help.
I submitted tax returns for 2008/09 and 2009/10 soon after those tax years ended. I recently (Feb 2012)submitted capital gains tax schedules showing NET losses for these years under the 4 year rule in order to claim the net losses to carry forward. I got a letter back rejecting the submissions as being too late to amend the returns for those tax years. How does one successfully submit CGT returns under the 4 year rule. (Sorry no qu mark as keyboard knackered).

[david77] 07/6/2012 07:34

Thanks Gengulphus.

[gengulphus] 07/6/2012 07:15

sleveen 12 May'12 - 08:43 - 6571 of 6578

HMRC have updated the negligible value list



david77 12 May'12 - 09:11 - 6572 of 6578

Thanks Sleveen - I've got Discover Leisure and FibreGen which are not on that list :-(

I don't know those two companies, but note that if they're AIM companies, they will never get on to the list. HMRC only do that list for London Stock Exchange main market companies, not for AIM companies, PLUS companies, companies that only have foreign listings, unlisted companies, etc.

So if the company that has gone bust isn't a London Stock Exchange main market company, waiting for it to get on to the list isn't a good tactic! Instead, you simply have to make the negligible value claim 'blind' - though you can make it in a separate letter well ahead of the tax return and accompany it with a request for a "post-transaction valuation check" ( ) to get some certainty about what you're saying in the tax return itself.

Even for London Stock Exchange main market companies, a company only gets on to the list once someone makes a successful negligible value claim for it. So if everyone were to adopt the tactic of waiting for the company to get on to the list, it would never get on to the list! (Not that I think that's at all likely to happen - London Stock Exchange main market companies tend to have enough shareholders that at least one of them will get on with the job of making the claim...)

Gengulphus

[gengulphus] 07/6/2012 06:54

From a while back (for some reason, the system has only told me about the last 20 or so posts on the thread today!):

Also, it stands to reason that as you said, one can't make a claim with a slam-dunk chance of success until the liquidators have stated the shareholders will get a negligible amount back.

So does this mean there's only a slim window within which to make the claim, because the liquidators will confirm there are no assets and then pretty soon afterwards will clear what creditors they can, wind it up, and dissolve it?
...
Or is this just a technicality in relation to 'deeming it negligible value' and if the company has literally stopped existing, you obviously can claim the total loss with a nice long (indefinite) window of opportunity?

As MIATA has replied, the window for a negligible value claim is not usually very slim.

But in addition, you're basically right about the technicality. Negligible value claims are for situations in which no loss has actually been realised yet, because although the asset is worthless, it still exists and is still in your hands. Once the company has been dissolved, its shares no longer exist and you can claim the actual loss in the normal way.

But there are three ways I can think of in which it's not a technicality:

* An actual loss is claimed simply by entering the loss in your tax return and accompanying it with a computation of the loss. For a negligible value claim, you have to actually write out the fact that you're making the claim.

* With a negligible value claim, you specify the date on which you're deemed to have realised the loss, within certain limits: it must be in the tax year in which you make the claim or one of the two preceding tax years, and it must be a date on which you owned the shares and the shares had already become of negligible value. With an actual loss due to dissolution of the company, you have no choice: the date of the loss is the date that the company was dissolved.

* While a negligible value claim remains possible, there is basically no time limit on making the claim. E.g. if a company became of negligible value in 2002, and you've owned the shares since before then without having made a negligible value claim yet, you can still make the negligible value claim. You can only make it to be deemed to have realised the loss in one of the 2012/2013, 2011/2012 or 2010/2011 tax years, not further back - but the usual "end of 4th tax year following the year of the loss" limit on claiming losses applies from that deemed date of the loss and so is automatically satisfied, not from the date that the shares became of negligible value.

But once the company is dissolved and the loss becomes actual, the clock starts ticking. You have the rest of the tax year in which the company was dissolved plus the following four tax years in which to claim the loss; if you fail to do so within that (rather long) time limit, the loss becomes forever unclaimable.

Gengulphus

[micos] 30/5/2012 16:43

This is just to clear a stuck thread

[sleveen] 21/5/2012 18:14

thanks david, seems to be OK now.

[david77] 21/5/2012 08:20

www.stonebanks.co.uk works for me.

[sleveen] 21/5/2012 08:17

Hi david, is there a problem with your website?

[rambutan2] 15/5/2012 01:11

brugen,

"On 17 June 2011, the Company was promoted to the FTSE All-Share Index."

Such an illiquid share can get tossed around by index activities.

[brugen] 14/5/2012 21:56

Does anyone have a view why this stock started to hit high daily volatility last July. Given the boringness of the underlying assets I would expect little volatility but from last July it has gone slightly haywire with higher volatility than the FTSE.

I'm in for the long term so it won't affect my on going purchases. In fact it helps me to buy on the very frequent dips.

I'm just interested if anyone can explain what is happening.

Regards

brugen

[daytraders] 13/5/2012 15:42

correct, if they went to a £1,000,000 you would not pay cgt, just think of it this way, any share you buy and sale within your isa, cgt dont apply ever, simples!

[theuniversal] 13/5/2012 15:09

thanks to all who posted, in my understanding of what you replied with. £2000 pounds of shares in a stock isa a year later the shares go up too £20,000 in my isa. if i sold the stock isa the proceeds it wont be taxed even if it is over the cgt allowance because it is still in an isa.

[gengulphus] 12/5/2012 23:06

theuniversal,

a friend of mine recomended a stock isa. so as far as my friend explained if i bought £2000 shares and they made £20,000 and i sold all of them but kept them in my isa ...

Sorry, you're not making sense. You cannot both sell something and keep it - it's a contradiction in terms.

The way to get the right answers in most such cases is to treat yourself holding directly and your ISA as two separate owners. If you are holding directly, you are subject to CGT, based on what you sold them for minus what you paid for them. Your ISA is exempt from it.

The tricky cases are when shares are transferred between inside and outside the ISA without there being any sale or buy. Transfers from inside the ISA to outside it are generally possible: when they're done, the ISA manager is supposed to tell you what the market value of the shares was on the day of the transfer, and you use that value as the price that you, holding directly, are deemed to have paid for them in any subsequent CGT calculation.

Usually, shares held outside an ISA cannot be transferred into an ISA - the closest you can come to it is to sell them outside the ISA, transfer the cash proceeds into the ISA as a subscription, and then use the cash (less dealing costs) to buy the shares inside the ISA. If that's done, your CGT calculations are straightforward: you calculate your gain or loss as usual as what you sold them for minus what you paid for them.

There is an exception to that "Usually, ...": shares obtained from some types of employee share scheme can be transferred directly into an ISA provided it is done within a time limit (6 months IIRC) after acquiring them. There is no CGT on such a transfer, but it is counted as an ISA subscription of the market value of the shares on the day of the transfer. (The other CGT aspect is which acquisition of shares is matched to the transfer - this affects the gains made on any other disposals of the shares. I think it has to be the acquisition via the employee share scheme rather than determined by the normal share-matching rules, but I don't know that for certain: unfortunately, tax rules are not always logically self-consistent...)

Gengulphus

[miata] 12/5/2012 18:22

What you need to know about ISAs
Within a Stocks & Shares ISA you pay no capital gains tax and no further tax on any income. You will get no tax relief for losses incurred on shares held within an ISA.

[daytraders] 12/5/2012 16:22

Not correct, you will not pay any capital gains tax even if your £2000 original purchase made £200,000, im 99.99999999% this is correct, but wait for Gengulphus to confirm.

What you need to know about ISAs
Within a Stocks & Shares ISA you pay no capital gains tax and no further tax on any income.

[che7win] 12/5/2012 16:08

It's correct.

[theuniversal] 12/5/2012 15:39

Gengulphus
a friend of mine recomended a stock isa. so as far as my friend explained if i bought £2000 shares and they made £20,000 and i sold all of them but kept them in my isa will i pay tax on the £9400 extra even if it is in my isa and i havent taken it out.

this is as best as i understood my friends expaination of this. is it correct or not.

[david77] 12/5/2012 09:11

Thanks Sleveen - I've got Discover Leisure and FibreGen which are not on that list :-(

[sleveen] 12/5/2012 08:43

HMRC have updated the negligible value list

[knil] 10/5/2012 22:50

Thanks for the responses MIATA and david77

[david77] 10/5/2012 18:51

knil - the stonebanks.co.uk calculator will show the calcs. CGTcalc gets the same result. Try them - see which you prefer.