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  • FIRST POST
    • Wagas
    • By Wagas 15th Sep 17, 10:57 AM
    • 7Posts
    • 5Thanks
    Wagas
    Calculating CGT on old inherited shares
    • #1
    • 15th Sep 17, 10:57 AM
    Calculating CGT on old inherited shares 15th Sep 17 at 10:57 AM
    My Mum and Dad inherited some shares back in August 1998 from my grandparents. They have now sold some of them and I'm trying to work out their CGT liability.

    Is it just a case of me calling the registrar and finding out the share price when my parents became owners and then calculate the CGT based on the recent sales price?

    Looking at an old statement it shows ownership of 1,760 Centrica shares at 101p. Their current share certificate shows 1,800 shares and these have been sold for 194p. They didn't buy 40 extra shares so were these freebies? How would I go about investigating this?

    They also own Whitbread which I believe was formally Bass. In 1998 they inherited 528 Bass shares at 1123p each and 592 'Bass !!! red pref 95.5p' shares at 92.5p. Well the Whitbread holding was just sold for £37 per share and the total holding was 389 shares so I'm not sure how to calculate the CGT for that...

    Shares that have just been sold:

    Whitbread
    BT
    BP
    GSK
    Vodafone
    Centrica

    Just wondering whether anyone on here takes an interest in this kind of thing and has any comments. Thanks
Page 1
    • bigadaj
    • By bigadaj 16th Sep 17, 8:49 AM
    • 10,725 Posts
    • 7,012 Thanks
    bigadaj
    • #2
    • 16th Sep 17, 8:49 AM
    • #2
    • 16th Sep 17, 8:49 AM
    It could get quite complicated so best to try and determine whether they have a liability.

    Shares can't be held in joint names so we're they owned by your mother, your father or both. There is an allowance of £11k each, so if the total gain is less than this you don't need to do anything, with hindsight it may have been easier for them to have sold in similar sized chunks.

    If that doesn't solve the issue it gets complicated. Several of these firms have been subject to mergers, demergers, share splits, it appears that they may also have accumulated shares in lieu of dividends.

    This could be a right pain to sort out, the registrars aren't interested in helping individual tax affairs so you're looking at tracing the share holdings individually over the last couple of decades.

    You can of course pay an accountant to do it but that could be expensive given how time consuming it's likely to be.
    • xylophone
    • By xylophone 16th Sep 17, 9:24 AM
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    xylophone
    • #3
    • 16th Sep 17, 9:24 AM
    • #3
    • 16th Sep 17, 9:24 AM
    Shares can't be held in joint names
    See post 7.

    http://forums.moneysavingexpert.com/showthread.php?t=3835417

    And relatives held HL Vantage account in Joint names for many years.

    https://www.informdirect.co.uk/shares/joint-shareholdings/
    • xylophone
    • By xylophone 16th Sep 17, 9:51 AM
    • 23,464 Posts
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    xylophone
    • #4
    • 16th Sep 17, 9:51 AM
    • #4
    • 16th Sep 17, 9:51 AM
    https://www.gov.uk/tax-sell-shares/work-out-your-gain

    They also own Whitbread which I believe was formally Bass.
    I am not sure about that. See post 6

    http://forums.moneysavingexpert.com/showthread.php?t=1426453

    https://en.wikipedia.org/wiki/Whitbread

    See also https://uk.practicallaw.thomsonreuters.com/5-100-7606?__lrTS=20170713100843817&transitionType=Defau lt&contextData=(sc.Default)&firstPage=true

    each of your parents has a CGT Allowance.

    https://www.gov.uk/government/publications/rates-and-allowances-capital-gains-tax/capital-gains-tax-rates-and-annual-tax-free-allowances
    • Wagas
    • By Wagas 16th Sep 17, 2:10 PM
    • 7 Posts
    • 5 Thanks
    Wagas
    • #5
    • 16th Sep 17, 2:10 PM
    • #5
    • 16th Sep 17, 2:10 PM
    Thanks for your input.

    The shares are definitely jointly owned as both of their names are on the share certs.

    Upon first glance it looks as though BT and BP have lost a fair chunk of money and this offset against the gains made from other shares keeps my mum and dad below their combined CGT allowance.

    Two q's:

    1. Does my dad still have to record the share sales and profit/loss on his tax return if his 50% share of the profit is lower than £11k or does he not have to bother detailing anything?

    2. My mum doesn't get asked to complete a tax return. Will she need to bother if her gain is less than £11k?
    • xylophone
    • By xylophone 16th Sep 17, 3:09 PM
    • 23,464 Posts
    • 13,640 Thanks
    xylophone
    • #6
    • 16th Sep 17, 3:09 PM
    • #6
    • 16th Sep 17, 3:09 PM
    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/615549/SA150-2017.pdf

    TRG Page 2 Note 7.
    • Wagas
    • By Wagas 16th Sep 17, 4:02 PM
    • 7 Posts
    • 5 Thanks
    Wagas
    • #7
    • 16th Sep 17, 4:02 PM
    • #7
    • 16th Sep 17, 4:02 PM
    'Fill in the ‘Capital gains summary’ pages and attach your computations if:
    • you sold or disposed of chargeable assets which
    were worth more than £44,400'

    Total shares sold was about £50k so £25k per person. Therefore under the £44,400 I presume?
    • xylophone
    • By xylophone 16th Sep 17, 4:27 PM
    • 23,464 Posts
    • 13,640 Thanks
    xylophone
    • #8
    • 16th Sep 17, 4:27 PM
    • #8
    • 16th Sep 17, 4:27 PM
    Fill in the ‘Capital gains summary’ pages and
    attach your computations if:
    • you sold or disposed of chargeable assets which
    were worth more than £44,400
    • your chargeable gains before taking off any
    losses were more than £11,100

    • you want to claim an allowable capital loss or
    make a capital gains claim or election for the year
    • you weren’t domiciled in the UK and are
    claiming to pay tax on your foreign gains on
    the remittance basis

    For 2017-18 the CGT Allowance increased from £11,100 to £11,500.

    You'll still need to compute the gain for each party.

    https://www.gov.uk/tax-sell-shares/work-out-your-gain

    Jointly owned shares and investments
    If you sell shares or investments that you own jointly with other people, work out the gain for the portion that you own, instead of the whole value. There are different rules for investment clubs.
    • IanManc
    • By IanManc 16th Sep 17, 8:47 PM
    • 347 Posts
    • 508 Thanks
    IanManc
    • #9
    • 16th Sep 17, 8:47 PM
    • #9
    • 16th Sep 17, 8:47 PM
    For 2017-18 the CGT Allowance increased from £11,100 to £11,500.
    Originally posted by xylophone
    For 2017/18 the CGT allowance is £11300, not £11500.

    https://www.gov.uk/capital-gains-tax/allowances
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