Capital Gearing Share Discussion Threads

[karateboy] 11/6/2014 10:40

Thanks Gen...

I have contacted Standard life and they were very helpful gave me the original number of shares in 2006 with price allocated to them and subsequent number of additional shares I have been given as a result of dividend investment from 2006 to 2013 and what the allocated price were each time. Based on this information I have calculated average price of my standard life share. I have manually entered my standard life share as Buy on the day of transfer with average price I have calculated for them with zero commission and no stamp duty paid. Subsequently in October I sold these shares through TDW. CGT calculator runs ok and produces a capital gain for these share. I hope this is ok now.

[sleepy] 10/6/2014 21:06

Topvest - you are busy tonight!

[topvest] 10/6/2014 21:02

Annual report arrived today. A very good write-up after a difficult year. First negative return in 30 years and Mr Spiller is taking it to heart as if someone had died..."It is with great sadness...." This is definitely a safe place for your money, but it's not cheap.

I'm surprised (as Lowland a couple of years back) that they have forfeited their 28 year dividend increase record and just held the dividend this year. They had a large revenue reserve so could have nudged it up and maintained their record. Bit short term in my view, particularly given the very low yield anyway.

[david77] 09/6/2014 08:38

EDITED: Cost nil for those issued free to policyholders, date issued is the date of acquisition. A google search will find the date of Std Life's float and price paid for more.

"Standard Life Flotation - Bestinvest
www.bestinvest.co.uk/article/4790/Standard-Life-Flotation

10 Jul 2006 - Standard Life was admitted to the London Stock Exchange at 8am Monday 10 July. The share offer price was 230p and the Preferential offer ..."

[karateboy] 08/6/2014 22:04

I have standard life share from privatisation . I had it transferred into my TDW account. Last year I sold it. CGT calculator failing due to me selling a share that I have no record of buying it. It was transferred into my TDW account...any body has similar experience ? Thanks in advance.

[gengulphus] 20/5/2014 08:02

BlueHorseshoelovesanacott,

No, sorry, I don't have any CGT calculators - the ones linked to in the header are done by other people. I personally use a 'homebrew' spreadsheet for my CGT computations (and no, I'm not going to make it publicly available - it would take far too much work to get it and instructions for it into a state where I was reasonably confident others could use it correctly...).

Gengulphus

[bluehorseshoelovesanacott] 19/5/2014 11:59

Gengulphus,

Do you have a CGT calculator for CFD profit/loss/summary similar to the most useful shares one? Would be very useful and make filing much easier.

Superb thread

KR

[farmer george] 19/5/2014 11:00

Thanks for your very lengthy and and clear explanation Gengulphus - your effort is appreciated.

FG

[gengulphus] 19/5/2014 08:48

A few corrections on minor-but-not-insignificant points:

FG, losses first have to be established with HMRC by reporting them in CGT section of tax return. ...

Or by writing a separate letter to the taxman about them - i.e. you don't have to wait for the next tax return to come around to do it, and it can for instance be a good idea to claim the losses early, with a request for a "post-transaction valuation check", so that you know where you stand by the time you have to complete the tax return in which you're going to use the losses.

... In the case of de-listed / failed companies a Neglible Value claim has to be made to HMRC as described several times upthread, including my post today. ...

That should be "In the case of failed companies that are still actually in existence ..." - i.e. that have not yet had their affairs completely finalised and been formally dissolved by their liquidators or administrators. You can check whether a company has been formally dissolved (and if so, on what date) on the Companies House website.

If the company has been dissolved, you have actually realised the loss on the date the company was dissolved. Provided you're still within the usual "up to the end of the 4th tax year after the tax year in which the was was realised" time limit for claiming a loss, you can claim the loss completely normally, just as though you'd sold the shares for nothing on that date and without any Negligible Value claim. And indeed you can no longer make a successful Negligible Value claim about them, as one of the conditions of making a Negligible Value claim is that you still own the asset concerned: when the company is dissolved, its shares cease to exist and so you cease to own them.

If the company has not yet been dissolved, but it clearly has no remaining value, you can make a Negligible Value claim about it, which if successful will mean that you can be treated as though you had sold the shares for nothing on a day named in your claim. There's no time limit on making a Negligible Value claim other than that it ceases to be possible when the company is finally dissolved, but there are restrictions on the date you can name: it must be after the date that the shares became of negligible value, it must be in the tax year in which you actually make the claim or one of the two preceding tax years, and it must also be a date on which the shares were still in existence.

Note by the way that my correction only says "failed", not "de-listed / failed". The reason for that is that a Negligible Value claim only works on shares (or other assets) that have no value or very nearly no value. A company failing will cause that to be true of its shares, but a company de-listing without failing will not. For example, I own some shares in a company called Norman Hay that de-listed from AIM some years back. It's still a thriving business, paying me dividends regularly, and it's still possible for a buyer and a seller to get together and agree a price at which to trade the shares - currently the going rate is about twice the price they were on when they actually delisted and a bit above the price just before the de-listing was announced. I.e. they still have value - they're just no longer listed on any stock exchange - and it's the first of those two facts that matters for Negligible Value claims: whether they're listed or not is irrelevant.

Gengulphus

[farmer george] 18/5/2014 23:14

OK, understood. Thanks for that.

FG

[m_k_hubbert] 18/5/2014 22:40

FG, losses first have to be established with HMRC by reporting them in CGT section of tax return. In the case of de-listed / failed companies a Neglible Value claim has to be made to HMRC as described several times upthread, including my post today. The gains made in any one tax year are then reduced in the following order in order to determine the amount of CGT (if any) payable:

1) Losses made in the same tax year.
2) Annual exemption limit, currently £11k for individuals
3) Losses brought forward from prior years (provided they have already been claimed with HMRC).

If the gains, less losses in the same tax year result in an overall loss the net loss is carried forward as an 'unused loss' for possible use in offsetting gains incurred in future years. The important point is to claim overall losses for a given tax year within 4 years i.e. by April 05 four years after the end of the tax year in which the overall loss was incurred. Note that the annual allowance plays no part in determining the amount of losses to be carried forward; it can only be used to reduce the amount of CGT due in a given tax year.

[farmer george] 18/5/2014 22:21

Perhaps a naive question, do 'unused losses' include firms that that been de-listed/gone bust?

FG

[m_k_hubbert] 18/5/2014 21:10

I'd like to thank Gengulphus and others for the quality information posted on this thread. I've used it, together with the Help functions on HMRC website, to submit a 'Negligible Value Claim' in respect of Endeavours Technology (previously Tadpole Technology). I'd already submitted my SA return for 2013/14 and owed just over £2k in CGT for tax year just ended; on this basis I've amended the return and elected that the disposal be deemed to have taken place on March 31, 2014 in order for the losses incurred on Endeavours to offset the gains thus reducing CGT liability to zero. That's not the end of it - I still have further unused losses to carry forward for future years which I'm likely to need unless markets take a tumble.

I don't think it should be a problem having this claim accepted given that Endeavours is on HMRC 'Negligible Value List'. So far I've submitted a summary of the purchase transactions but have all the contract notes to hand together with a 2008 statement from my broker showing the amount held shortly before the quote was cancelled. I'd be interested to hear if anyone filing a similar claim has been asked to produce the contract notes etc.

Thanks once again!

[gengulphus] 22/4/2014 00:47

Hmm... That's probably not as strong a form of wording as I would really like - saying it would be "prudent" suggests to me that they're saying that it's perfectly possible that there won't be any more. Whereas it being unrealistic to expect anything more would be more that it's overwhelmingly likely that there won't be anything more, which is rather stronger...

But I'm not necessarily all that good at reading the 'code' of such statements (I'm not a tax professional, just a reasonably informed layman), and shares-now-of-negligible-value seems a plausible reading of that one. So I wouldn't see any harm in making a negligible value claim about them, with the post-transaction valuation request attached, and seeing what the result is. It's basically a heads-you-win, tails-you-draw situation...

Gengulphus

[battlebus2] 21/4/2014 23:45

Many thanks Gengulphus, the last report from the liquidators dated 6th January 14 stated it would be prudent for shareholders not to expect a return of any further monies.

[gengulphus] 21/4/2014 23:09

Izodia plc is listed on the Companies House WebCHeck service as "In liquidation", which indicates that the company and its shares still exist. That's the first condition for being able to make a negligible value claim - if the company no longer existed, you would only be able to claim a loss arising on the date that they ceased to exist (or not claim a loss at all if that date was too long ago).

The second condition is that the shares must now have negligible value - which for shares is basically true if there is no realistic chance of shareholders getting any further returns. I don't know the company and so don't know whether that's the case or not, and unfortunately the phrase "last special dividend" that you've used could mean either the most recently-received payment with the possibility of more to come, or that it is the last payment ever to be expected. If the latter, then the shares almost certainly now have negligible value; if another payment is expected or is at least a realistic prospect, they don't... The people who can tell you (or may have already told you) are the company's liquidators.

There are other conditions - the shares must have become of negligible value during your period of ownership (i.e. if someone buys shares when they are already of negligible value, they cannot make a negligible value claim about them) and the date you claim they had become of negligible value (you want a date last tax year to get the resulting loss in that tax year) must be after they became of negligible value, within your period of ownership and within the current tax year or one of the two preceding tax years. But those should all be no real problem, unless the special dividend payment you mention is very recent (so that the shares became of negligible value this tax year).

So the crucial question is whether there is any realistic prospect of further payments, and if not, did that become the case before the current 2014/2015 tax year started on April 6th? The liquidators may have already told you the answer; if not, you need to ask them. If the answer is that there is no realistic prospect of that, and that that became the case during the 2013/2014 tax year or earlier, you should have what you need to make a successful negligible value claim.

Assuming that checks out, don't let the absence of the company from the HMRC website's negligible value list put you off making a claim: companies only ever get on to that list as a result of someone making a successful negligible value claim! Someone has to be first... And at least technically, you need to make the negligible value claim anyway even if the shares are on the negligible value list: what the list provides is certainty that a negligible value claim will be accepted, not a release from needing to make one. Also, this is a good time of year to put in a negligible value claim: you can use a separate letter to put the claim in along with a request for a "post-transaction valuation check" ( see ), and you should get their decision back well before you need to file your tax return.

Gengulphus

[battlebus2] 20/4/2014 11:03

I thought i would contact the experts on this, i will have to pay quite a bit of CGT this year so i'm looking at ways to bring this down. Can i claim for a old holding of 3k worth in the former Infobank which was renamed Izodia, it's technically wound up and the last special dividend was paid last year from recovered funds but i'm not sure when it qualified for negligible value or if it has to date. It's not listed on the 2013/14 HMRC site.
Any help appreciated.

[zimbi] 17/4/2014 08:14

Cheers David and Miata.

[miata] 16/4/2014 22:34

zimbi, cgtcalculator now updated with £11,000 annual exempt amount.

[david77] 16/4/2014 21:34

A lot of brokers (including mine - Charles Stanley Direct - was Fastrade) will 'lend' you the ISA money until the sale completes so that you get a close sell/buy price and reduced commission - and you are not out of the market if the share price goes up as you hope.

[zimbi] 16/4/2014 20:35

:-)
I think my broker requires funds to be in the ISA first.

[david77] 16/4/2014 20:02

Get your broker to do a sell-and-ISA deal. You'll get a better deal than if you do it yourself. Assuming you are just doing the current year's ISA, the max is £11,880. The CGT allowance for the current year is £11,000 so if you paid more than £880 for the shares you want to put into your ISA then you will be within your CGT allowance.

Check the figures!!