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  • FIRST POST
    • danm
    • By danm 13th Mar 17, 4:26 PM
    • 419Posts
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    danm
    CGT on stock split
    • #1
    • 13th Mar 17, 4:26 PM
    CGT on stock split 13th Mar 17 at 4:26 PM
    Was just about to transfer my Google stocks into a ISA to use this years CGT (first time i have ever done anything like this)... and realised that there was a stock split a few years back...

    Presumably i do not treat the cost basis of the new stock as zero for the purpose of CGT?

    Do i add the total new holdings together and divide by the original cost base?

    thank in advance.
Page 1
    • bowlhead99
    • By bowlhead99 14th Mar 17, 7:16 AM
    • 6,479 Posts
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    bowlhead99
    • #2
    • 14th Mar 17, 7:16 AM
    • #2
    • 14th Mar 17, 7:16 AM
    Effectively you have paid nothing other than the original purchase price, so _all_ of what you are holding now was obtained for that original total cost, and you would need to apportion that total cost over the old and the new shares. If all the shares are the same class, it would be as simple as dividing the original cost base by the revised total number of shares you now have, to find out what they each 'cost' per share.

    Then you'd use that cost per share when comparing with the sale proceeds to see what gain you've made on the ones you sold to fund your ISA.
    • EdSwippet
    • By EdSwippet 14th Mar 17, 9:38 AM
    • 486 Posts
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    EdSwippet
    • #3
    • 14th Mar 17, 9:38 AM
    • #3
    • 14th Mar 17, 9:38 AM
    If all the shares are the same class, it would be as simple as dividing the original cost base by the revised total number of shares you now have, to find out what they each 'cost' per share.
    Originally posted by bowlhead99
    Working out the cost per share of differing share classes can be fiddly. Google's stock split in 2014 created class A and class C shares, and the split was 50.08% class A and 49.92% class C, so the 'cost' of each split share is in that ratio.

    Now, if the OP is moving all their Google shares in one go, and if they have not traded any Google shares since the split, the complications all disappear, and the cost is just the original price paid. Otherwise it's going to be apportioned according to the number of each class of shares transferred. In practice, I'd say the split was close enough to 2:1 that nobody is going to notice the difference, but ten minutes with a spreadsheet should give the exact figures fairly easily.
    • bowlhead99
    • By bowlhead99 14th Mar 17, 1:09 PM
    • 6,479 Posts
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    bowlhead99
    • #4
    • 14th Mar 17, 1:09 PM
    • #4
    • 14th Mar 17, 1:09 PM
    Yes, it can be fiddly : my caveat was just that *if* they're all the same class *it would* be as simple as.... Without looking up this specific corporate event

    Basically what you end up with after the split has the same total cost as it did before the split, but if one part of your new holding has a higher proportionate value than another part, the cost should be apportioned over the two parts accordingly.
    • danm
    • By danm 15th Mar 17, 8:37 AM
    • 419 Posts
    • 145 Thanks
    danm
    • #5
    • 15th Mar 17, 8:37 AM
    • #5
    • 15th Mar 17, 8:37 AM
    Working out the cost per share of differing share classes can be fiddly. Google's stock split in 2014 created class A and class C shares, and the split was 50.08% class A and 49.92% class C, so the 'cost' of each split share is in that ratio.

    Now, if the OP is moving all their Google shares in one go
    Originally posted by EdSwippet


    Unfortunately not moving all in one go but think I understand what you have said.


    Using a practical example :
    if I original invested £5000 for 10 shares


    then following the split I have


    Class A = £5000 * 50.08% / 10 = £250.4 per share
    Class C = £5000 * 49.92% / 10 = £249.6 per share


    is that correct?
    • EdSwippet
    • By EdSwippet 15th Mar 17, 9:18 AM
    • 486 Posts
    • 452 Thanks
    EdSwippet
    • #6
    • 15th Mar 17, 9:18 AM
    • #6
    • 15th Mar 17, 9:18 AM
    ... is that correct?
    Originally posted by danm
    Yes .
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