CGT on selling shares

stevedresden · 21 September 2017 at 3:00PM

I'm having trouble working out the potential Capital Gains Tax on selling shares, as all the calculators seem to assume that you bought the shares or inherited them.

I did neither

I'm a British national, I live in the UK work for a global US multinational company. A few years back they started to give small amounts of stocks to employees as "bonus" rewards.

These weren't apparently classed as Employee Share Schemes for tax purposes, so whatever they were worth when they were gifted to me, I paid the appropriate amount of UK tax on them through payroll.

Over time, through splits and mergers this has now resulted in me owning shares in 4 different companies! They are all held in a US brokerage account in US dollars

Current value is around $12,000 so I'm in no rush to cash them in, but wary of being liable for CGT if I do.

Does anyone have any experience or knowledge of situations like this?

HappyHarry · 21 September 2017 at 3:25PM

The value of the shares (i.e. volume x share price) when you acquired them is your base cost.

It matters not whether you purchased them, inherited them or were gifted them.

You will have to look at each of the four shares you have, and work them back to establish the gain.

I'm sure you are aware, but you do have a £11,300 per year Capital Gains Tax allowance. If the shares are worth $12,000 in total it is unlikely you will exceed this allowance unless you have other gains this year.

EdSwippet · 21 September 2017 at 5:17PM

stevedresden wrote: »

Over time, through splits and mergers this has now resulted in me owning shares in 4 different companies! They are all held in a US brokerage account in US dollars.

Starting in 2011, US brokers were required by law to track the 'cost basis' of shares and other investments. So depending on how long you have owned these things, if you poke around in your US brokerage account with enough diligence you might find a record of what you effectively 'paid' for these shares in there somewhere.

In your shoes I would strongly consider selling the lot now or before April next year at the latest. Assuming you have no other capital gains in the tax year, there is no chance at all at current USD/GBP forex rates that you could have capital gains of more than the £11,300 allowance for the year, and would have no need to even complete the CGT pages under these conditions.

Then buy some other stocks with the proceeds, perhaps a diversified global tracker fund. (Or, if you really must repurchase these shares for any reason, do so through a UK broker and remember to wait more than 30 days before doing to to avoid the silly 'bed-and-breakfast' tax rules.)

aberlyfid_2000 · 21 September 2017 at 8:13PM

you might want to have a look into using the tax contributions for the share "gifts" as a part of the cost for calculating CGT. You seem to fall under the limit though

CGT on selling shares

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