Capital Gearing Share Discussion Threads

[ziblot] 11/11/2018 16:22

Hello Gengulphus, any one?

Had shares in Sou who divested there Italian asset to Coro Energy. I received 20591 shares which was known as the Repayment Record Date. How do I enter the transaction in the CGT Calculator. Thanks All.

[steve73] 11/11/2018 02:46

serratia - I got some US listed stocks moved from the US holding broker into my I-dealing account (not ISA). Took a few months though.

[who r u who r u] 10/11/2018 12:40

Thanks guys..

[serratia] 10/11/2018 10:38

I receive dividends from a US company. The tax rate on dividends according to these links is 30%. I've filled in WBN forms and this tax is reduced to 15% as a special withholding tax.
When I fill in my UK tax form the tax office treats me as already having paid 15% tax. I don't get the 15% back as that's a US tax. My shares are not in an ISA, they're held by computershare in the US and my broker says it's a problem to get them transferred out into a UK broker. If they were in an ISA there would be no CGT to pay on disposal.

[steve73] 10/11/2018 09:09

As I understand it, you don't need to pay any CGT on disposals within an ISA, but unless you have filled in your WBN you will pay US tax on the divi's that you can't claim back. With a regularly submitted WBN, you pay no tax on divi's, and if held in an ISA there's no further tax to pay.

[who r u who r u] 10/11/2018 05:10

has anyone bought US stocks in to ISA?
we don't pay cgt in ISA but would we need to pay any US tax and if so is that automatically deducted on our disposals?

Really sorry to post this here because i just couldn't find the info but i'm interested in buying US stocks but apart from filling in a WBN form i don't what/if anything i need to know.

[dcarn] 08/11/2018 21:08

Gengulphus,

Many thanks for the clarification.

Dcarn.

[gengulphus] 31/10/2018 06:33

dcarn,

Scenario being I have section 104 holding in share xyz with no purchases being made since 2015 and I have never sold any. I then purchase 10000 xyz shares on 15-10-18 for a short term trade and then sell 10000 xyz shares three weeks later on 5-10-18 for a small profit.

Question, does the 10000 purchase have to be added to the section 104 holding before calculating any gain / loss or is this treated as a matched trade under the 30 day rule?

It gets added to the section 104 holding, then the subsequent disposal identifies the shares sold as a portion of the section 104 holding, as normal.

HMRC HS284 is clear enough for disposal then acquisition within 30 days but it does clarify for acquisition and the disposal within 30 days.

That's because the same-day rules and the 30-day rule are exceptions to the normal way of using the section 104 pool. There is no such exception for disposal in the 30 days following acquisition, only for acquisition in the 30 days following disposal.

Gengulphus

[dcarn] 30/10/2018 16:05

Hi,

I've a question with regards to section 104 holding, share purchase and subsequent sale.

Scenario being I have section 104 holding in share xyz with no purchases being made since 2015 and I have never sold any. I then purchase 10000 xyz shares on 15-10-18 for a short term trade and then sell 10000 xyz shares three weeks later on 5-10-18 for a small profit.

Question, does the 10000 purchase have to be added to the section 104 holding before calculating any gain / loss or is this treated as a matched trade under the 30 day rule?

HMRC HS284 is clear enough for disposal then acquisition within 30 days but it does clarify for acquisition and the disposal within 30 days.

Dcarn.

[fbrj] 25/9/2018 19:35

Gengulphus - a big thank you from me too!

Your reply obviously wasn't just dashed off in a couple of minutes so I really appreciate you for taking the time and effort in responding.

I can understand what you are proposing - just a matter of implementing (correctly!).

Thanks again

[asif12] 19/9/2018 21:25

Hi Gengulphus

Thank you for your reply. Sorry for the delayed response in getting back.

I will try the other thread as well.

Thanks

[gengulphus] 18/9/2018 10:40

asif12,

I've no experience of investing in Dubai and very little of investing abroad. But in very general terms, my impression is that the sort of thing you're talking about is more likely to be treated as some sort of partnership income than as capital gains - though it may well be possible to get various different tax treatments by structuring it appropriately.

I've got little knowledge of the range of options is for structuring such a deal, nor of what their various advantages and disadvantages are. And this is a thread specifically about CGT, rather than about tax more generally. So I think you would probably do better to ask on a more general thread about tax - might help you find one. (Though to be frank, dealing with tax issues involving multiple countries is a somewhat specialist subject, and the answers differ depending on the countries concerned - so one generally needs to pin such a question down to specific countries, and when one does so, it becomes more specialist. So you might end up needing to try to find a more specialist tax board, see whether you can get some answers from HMRC, or pay for tax advice. But I'm not saying you definitely do need to do any of those things - I simply don't know enough to even be able to say that for certain!)

Sorry I can't be of more help.

Gengulphus

[gengulphus] 18/9/2018 10:13

fbrj,

During the course of the last tax year I switched most of my trading to Hargreaves Lansdown. How do people convert their HL trades into a suitable format, other than a 1 by 1 line by line alteration of a downloaded spreadsheet? Previously with Barclays I just pasted my downloaded Excel files into the calculator.

I've no real experience of either cgtcalculator or Hargreaves Lansdown. But as a general rule, I'd expect to be able to do that sort of conversion by putting the spreadsheet I've got in one worksheet, then constructing the first row of another worksheet by formulae from the first row of that worksheet. So as a very simple example, suppose I had a list of trades in Sheet1, with the first column being B for Buy or S for Sell, the second being the number of shares bought or sold, and the third being the amount of cash spent or raised. And suppose I instead wanted it in the form (net change to number of shares) followed by (net change to amount of cash), then I could set cell A1 of Sheet2 to:

=IF(Sheet1!A1="B",Sheet1!B1,IF(Sheet1!A1="S",-Sheet1!B1,#N/A))

and cell B1 on Sheet2 to:

=IF(Sheet1!A1="B",-Sheet1!C1,IF(Sheet1!A1="S",Sheet1!C1,#N/A))

That takes a bit of time to do, but once done, I can then just copy row 1 on Sheet2 to further rows to do the same conversion on each corresponding row of Sheet1. I.e. basically very little work after the first row has been converted - though do check the details of an instance of each type of row to make certain the conversion formulae being used handle that type correctly!

And one other tip about the technique is that if you find an error in the conversion formulae, correct it in the first row and then re-copy the first row to all other rows. Otherwise, you're liable to find yourself with a spreadsheet in which different rows have different bugs remaining unfixed in them, which can be a bit of a nightmare to sort out if you later encounter further problems in the spreadsheet...

Gengulphus

[asif12] 15/9/2018 09:35

Just wondering if anyone has invested in a business in Dubai and what the tax implications are when you bring that money to the UK. I am UK resident and pay taxes here. Here is what I am planning to do (still early stages though).

My cousin who lives in Dubai is starting a jewellers. He asked me if I would like to invest in the business. As it is related to gold i am very keen. I am thinking of maybe investing around £20K or maybe invest money to buy 1kg of gold(so roughly about £35K). He will send me the profit i make each month through bank transfer etc.

Anyone know what sort of information i need to keep to show HMRC when i file my return?

In terms of his credentials - he is very good at what he does as he has many years experience in the gold business. If it is straight forward for me to invest then I might go for it.

If anyone has invested in Dubai etc - any advice would be much appreciated.

[fbrj] 11/9/2018 23:57

I've used the excellent cgtcalculator.com for many years. I have 2 questions:

During the course of the last tax year I switched most of my trading to Hargreaves Lansdown. How do people convert their HL trades into a suitable format, other than a 1 by 1 line by line alteration of a downloaded spreadsheet? Previously with Barclays I just pasted my downloaded Excel files into the calculator.

I only have hard copy of previous cgt returns (pc crash - and have lost my underlying spreadsheets). I have a figure for b/fwd losses for future offset. In constructing a spreadsheet for 2017/18 it seems to me that all I can do is to insert a fictitious trade in order to generate the correct b/fwd loss figure and inform HMRC what I have done. Any other suggestions?

[harrogate] 04/9/2018 07:23

Much appreciated Gengulphus. Thank you

[gengulphus] 03/9/2018 15:28

Harrogate,

Yes, I think you're right, and that's what I would do (except of course that if the gains previously deferred were on unlisted shares, I would use box 34 instead of box 26). I think I would also say something brief in box 54 such as "CGT computations include revived gains of £NNN that were previously deferred under EIS relief."

Cannot say that I'm 100% certain that's the exact way one is supposed to do it, but I don't know of a better one, and if by any chance it is wrong in some way, I don't think HMRC could do much more than tell one how to do it next time...

Gengulphus

[harrogate] 03/9/2018 13:55

Can someone tell me where on the CGT pages I include the amount of gain that I had previously obtained EIS relief on now I have sold the EIS shares after the 3 year period? Do I just include it as a "gain" in box 26 and show in my CGT calculation as gain previously deferred under EIS relief ( shares now sold) ? Really appreciate the help
Thanks

[rhcm] 07/5/2018 15:03

Gengulphus

Many thanks for clarifying the situation regarding brokers fees, you have saved me from falling foul of the Inland revenue. I cannot thank you enough.

[gengulphus] 07/5/2018 13:27

rhcm,

No, sorry, a fee has to be wholly and exclusively for the specific asset to be an allowable cost for CGT. A broker's quarterly fee is (unless I'm misunderstanding what you're talking about) for providing the account, which you could use for any number of shareholdings, and so it's not wholly and exclusively for any specific shareholding, and not an allowable cost for any of your shareholdings.

That might be a debateable point if you opened the broker account only for the purpose of holding one specific shareholding, and only ever actually used it that way. But I wouldn't bet on it!

Edit: By the way, I don't really know what you mean by "Can I still use ..." - broker's quarterly fees have never been allowable costs within my experience of CGT (roughly the last 20 years)...

Gengulphus

[rhcm] 07/5/2018 11:19

Gengulphus,
many thanks for the detailed reply, you really have been a great help. I would not want to make a claim immediately as i plan to use the loss in the future. Can i still use the brokers quarterly fee as an expense and add it to the loss in a similar way to brokers trading fees?
Thanks

[gengulphus] 05/5/2018 11:25

rhcm,

How to claim this as a loss?
I am in the process of moving broker and I have one company IFL which is currently suspended and the company have said shares are unlikely to be of any worth to shareholders. The new broker will not accept the transfer and the current broker cannot obtain a paper certificate. They have advised that the shares could be gifted to a charity via sharegift but how can i claim the capital loss?
Many thanks for your help.

First, do NOT try to use your broker as your tax adviser, unless you have a specific agreement with them that they will act as such. The terms and conditions for an execution-only broker account specifically exclude them giving you financial advice of any type, which includes tax advice (that's basically why it's called 'execution-only'), and even other, more expensive types of broker account such as advisory or discretionary accounts might well have limitations on the types of financial advice the broker will supply.

The reason I emphasise that so much is that giving the shares to a charity is one of the most certain ways to ensure that you cannot claim the capital loss! As the ShareGift website says (with my bold), "donating shares charitably gives rise to neither a gain nor a loss for Capital Gains Tax (CGT) purposes". I.e. giving the shares to ShareGift is of no value to you, nor to the charity (assuming that they really are worthless - it certainly sounds as though they are!). The broker is IMHO being rather irresponsible by even suggesting the course of action as a possibility - it is one, and they're not giving any financial advice by merely saying it's something they can do, but clients who aren't fully aware of what 'execution-only' means could easily read it as implying that donating the shares to ShareGift is a good idea... It generally isn't when you've made a loss on a share, especially a total loss!

The answer about what you need to do to claim the loss is: make a negligible value claim. Not "wait for HMRC to declare the shares to be of negligible value, then make a negligible value claim", just make one once you're reasonably certain
that they are indeed worthless (*). Usually, the point when you become reasonably certain of that for a company is when you get a statement that there is no realistic prospect of any return to shareholders from someone in a position to state that authoritatively - e.g. the administrator of a company in administration. I would generally be happy to base a negligible value claim on such a statement - indeed, I believe the reason such statements are made to shareholders is (besides informing them of the bad news about their investment) that it enables them to support a negligible value claim.

Why shouldn't you wait for HMRC to declare the shares to be of negligible value? Quite simply, the reason is that HMRC generally (a) only decide whether shares are of negligible value when they're asked to make a decision by a taxpayer making a negligible value claim; (b) even when they have made such a decision, generally don't make a public declaration of the decision. They do make such a declaration in some cases, by adding it to a 'Negligible Value agreements' list . But that list is limited to (in its own words) "shares formerly quoted on the London Stock Exchange", and "quoted" is a somewhat-slippery term with regard to tax... It certainly doesn't have the obvious 'everyday' meaning that "the London Stock Exchange quotes prices for it", as shares traded on AIM are clearly "quoted" in the 'everyday' sense but I have never seen a collapsed company on AIM make it on to the list...

Just what the exact requirements are to get on to the list, I haven't managed to work out, but in general, I would take the presence of a share on the list to mean "yes, HMRC will accept a negligible value claim for this share, provided the claim's dates fit the entry", but its absence to merely mean "you'll need other support for a negligible value claim about the share you're interested in". Note incidentally that presence on the list is not a substitute for a negligible value claim - you need to make one to establish the loss whether or not the share is on the list, it's just that if it is on the list and your claim fits the dates, you have the assurance that HMRC will accept the claim.

One other thing I'll mention is that you can accompany a negligible value claim with a "post transaction valuation check" request - see and the form it links to (the latter contains most of the information). That's another way to get assurance about whether HMRC will accept the claim - and especially around this time of year, you can send in the negligible value claim and "post transaction valuation check" request and leave HMRC plenty of time to tell you their answer before you have to submit the tax return.

(*) And that you actually want the loss. You're not obliged to make a negligible value claim for any specific date - it's just got to be a date:

* When the shares are of negligible value (and have become so since you acquired them).

* That is in the tax year that you make the claim or one of the previous two tax years. (The previous tax year is probably the most common case - e.g. a claim submitted with a tax return now is for the 2017/2018 tax year that that tax return is about, but made in the 2018/2019 tax year.)

* You still own the shares, and you must still own them on the likely-to-be-later date that you actually make the claim. (Basically, once you no longer own the shares, you have actually disposed of them for CGT purposes and so have actually realised the loss. Negligible value claims are there to allow people to deal with assets that have become worthless but they have difficulty actually disposing of, and so the rules don't allow you to waste the taxman's time with them once you have actually disposed of an asset.)

It may be that claiming the loss now is not something you want to do - e.g. it might be that dates in the 2016/2017 tax year are before you can establish that the company is of negligible value (note I haven't researched IFL more than very superficially for this post!), that your net gains in the 2017/2018 tax year are below the CGT allowance and so the loss would simply end up being wasted offsetting gains that weren't going to attract any CGT anyway, and that it's too early in the 2018/2019 tax year to be certain whether the loss would end up saving CGT or not. In that case, it's perfectly OK for you to defer making the negligible value claim until a time when you can get some CGT savings from the loss - though note that if you keep deferring making it in that way, eventually you will probably find that you have actually disposed of the shares and so actually have realised the loss, on a date not of your choosing. (The common case for that is that a company in administration or liquidation eventually gets dissolved, i.e. ceases to exist. Its shares cease to exist at the same time, and an asset ceasing to exist counts as actually disposing of it for CGT purposes. I don't know exactly what is happening to IFL, though, and given its international aspects, very possibly wouldn't understand exactly what the CGT treatment would be even if I did know...)

Gengulphus

[rhcm] 03/5/2018 15:34

How to claim this as a loss?
I am in the process of moving broker and I have one company IFL which is currently suspended and the company have said shares are unlikely to be of any worth to shareholders. The new broker will not accept the transfer and the current broker cannot obtain a paper certificate. They have advised that the shares could be gifted to a charity via sharegift but how can i claim the capital loss?
Many thanks for your help.

From the broker:
Please accept this message as confirmation that unfortunately,
International Ferro Metals is unavailable for certificated withdrawal. We would
either be able to offer to donate this holding to charity on your behalf via
Sharegift, or you would need to find another broker who is willing to accept
the transfer of a zero value stock.

From the sharegift site:
If you are a UK taxpayer, you can claim income tax relief on the value of most stocks and securities when you donate them to a charity. In addition, donating shares charitably gives rise to neither a gain nor a loss for Capital Gains Tax (CGT) purposes. This means that you will not be liable for any Capital Gains Tax (CGT) which you might have had to pay had you decided to sell the shares instead. However, you should be aware that you cannot offset a loss against other gains if the shares you donate have gone down in value.

Perhaps i will have to wait for HMRC to declare negligible value but that can take years and I will have to pay the brokers quarterly fee until the shares that time but that can be added to the CG loss. Is that correct?

Many thanks for your time

[sux_2bu] 13/4/2018 15:59

Gengulphus

Thanks.

[attrader] 11/4/2018 14:58

Thanks for such a detailed response. I guess you are right in duty-free shop analogy, it costs a lot more to set these structures up. So, unless someone has more than 30m it does not make sense to do it.