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Rights Issues and Capital Gains Tax

Gopes
Gopes Posts: 128 Forumite
edited 30 March 2010 at 7:11PM in Savings & investments
OK,
Capital Gains Tax (CGT) calculations are complicated enough, as they are, but generally, I can laboriously work my way through them.

TIP: There is a good calculator at www.cgtcalculator.com, which seems to do a good job.

In a sensible world, HMRC would provide a spreadsheet or other utility to assist tax payers with the calculations...

However, the calculations regarding a rights issue have truely befuddled me. Can anyone shed some light?

By way of example, lets look at Lloyds:

1 - I acquired 4258 shares at £0.67 per share on 04/06/2009 (costs of £24.35)
2 - I then acquired 2480 shares at £1 per share, on 03/09/2009 (costs of £12.38)

So I now have a S104 holding of 6738 shares at an average net cost of £0.8004 per share.

Lloyds then underwent a (1 for 1.34) rights issue in December. As the holding was in my ISA, which was fully subscribed, I decided to sell the rights, and then buy additional shares.

3 - I sold 9028 Rights at £0.184 per share, receiving £1660

Question 1: How do I calculate the capital gains tax on this sale of my rights?
Question 2: How do I calculate my new S104 holding?

4 - I then purchased 3332 shares at £0.493 on 21/12/2010 (costs of £18.21)
5 - I then sold 5000 shares at £0.62 on 30/03/2010 (costs of £8)

Question 3: Assuming I do not buy any further Lloyds shares within the next 30 days, what is my CGT on this sequence of transactions? If the rights issue had not got in the way, I would be able to calculate this - but the rights issue has left me scratching my head.

If someone could give me an explanation (as if I was a '4 year old'), that would be greatly appreciated - I have promised myself that I will do my tax return for 2009-10 in good time, so need to get my head around this...

Any ideas?
Thanks
Gopes

Comments

  • Gopes
    Gopes Posts: 128 Forumite
    Anyone have any ideas?
  • sabretoothtigger
    sabretoothtigger Posts: 10,035 Forumite
    Part of the Furniture 10,000 Posts Photogenic Combo Breaker
    chartimagecgi.png


    This chart is adjusted for the rights price dilution, maybe use this to estimate what your total gain is. Its from digitalook


    Doesnt sound like you made enough to pay taxes and isa has no cgt
  • Gopes
    Gopes Posts: 128 Forumite
    Thanks for suggestion. I don't think it is accurate enough a method to easily calculate the capital gain.

    I have other gains, so likely to have to cough up some £££ to HMRC :mad:,

    Any other ideas?

    Cheers
    Gopes
  • Gopes wrote: »
    As the holding was in my ISA, which was fully subscribed, I decided to sell the rights, and then buy additional shares.


    If all these transactions were within an ISA, there is no need to calculate a capital gain.

    There is no liability to CGT on gains within an ISA.
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