CGT and the 30 day rule? RDSA & RDSB

soulsaver

Ok I want to crystallise some gains this tax year, to utilise my CGT allowance.

I am aware the HMRC rule is that I cant buy the sold shares back within 30 days, or I'm deemed not to have made the sale.

So could I sell my Royal Dutch Shell 'A' shares and immediately buy RDSB and still have been deemed to have made the gain in this tax year?


BTW I looked at posting in the 'Tax' section which seems to deal mainly with income tax issues and thought maybe the investor types here would be a better option:)

SnowMan

soulsaver wrote: »

Ok I want to crystallise some gains this tax year, to utilise my CGT allowance.

I am aware the HMRC rule is that I cant buy the sold shares back within 30 days, or I'm deemed not to have made the sale.

So could I sell my Royal Dutch Shell 'A' shares and immediately buy RDSB and still have been deemed to have made the gain in this tax year?


BTW I looked at the 'Tax' section which seems to deal mainly with income tax issues and thought maybe the investor types here would be a better option:)

Have a look at the section of the HMRC manual Share identification rules: share disposals: CGT cases from 6.4.2008 at this link

http://www.hmrc.gov.uk/manuals/cgmanual/cg_app10.htm#IDAEAYAG

In relation to the 30 day rule it seems to talk there about matching acquisitions and disposals of shares of the same class in the same company.

I'm no expert though.

Mikeyorks

soulsaver wrote: »

I am aware the HMRC rule is that I cant buy the sold shares back within 30 days, or I'm deemed not to have made the sale.

The 30 day rule relates to 'the same class of shares (in the same company)'.

As RDSA and RDSB are traded as seperate entities on the London Exchange then - by HMRC definition - they are not the same Class. Therefore you can do as you suggest. The definition is in here :-

http://www.hmrc.gov.uk/manuals/cgmanual/CG50203.htm

shares or securities of a company shall not be treated as being of the same class unless they are so treated by the practice of a recognised stock exchange or would be so treated if dealt with on a recognised stock exchange'

An alternative is to sell the RDSA just before the end of the tax year and then buy them back in an ISA (max £10680) on the 6th April? This 'bed and ISA' gets around the 30 day rule .... if the values involved work?

soulsaver

Mikeyorks wrote: »

The 30 day rule relates to 'the same class of shares (in the same company)'.

As RDSA and RDSB are traded as seperate entities on the London Exchange then - by HMRC definition - they are not the same Class. Therefore you can do as you suggest. The definition is in here :-

http://www.hmrc.gov.uk/manuals/cgmanual/CG50203.htm


An alternative is to sell the RDSA just before the end of the tax year and then buy them back in an ISA (max £10680) on the 6th April? This 'bed and ISA' gets around the 30 day rule .... if the values involved work?

Yep; this 'scam' is in addition to the share I'm bed&isa ing. Unfortunately the gains are a relatively small % of big ish £numbers so can't do enough with b&i, but hit on this idea.

And I should be in 'B's anyway.

Nevertheless, another good performance and I'd switch back for the same loop hole nearing next year end:)

Biggles

soulsaver wrote: »

And I should be in 'B's anyway.

True, with RDSA your dividend is paid in Euros and subject to 25% Dutch tax.

sabretoothtigger

Its 20% here anyway isnt it

noh

sabretoothtigger wrote: »

Its 20% here anyway isnt it

No

It's 10% for basic rate tax payers and that is satisfied by the attached tax credit so effectively 0%.

http://www.hmrc.gov.uk/taxon/uk.htm#2

soulsaver

Biggles wrote: »

True, with RDSA your dividend is paid in Euros and subject to 25% Dutch tax.

I believe 15% Dutch retention tax - either way I intend to make the switch before the next qualifying date which iirc is mid/late March (17th or 22nd?).

soulsaver

soulsaver wrote: »

I believe 15% Dutch retention tax - either way I intend to make the switch before the next qualifying date which iirc is mid/late March (17th or 22nd?).

http://www.shell.com/home/content/investor/share_price_information/difference_a_b/

Yep 15%; T'was 25% upto 2006. Interestingly it DOES state that's for Netherland residents.

My shares are shown as 'RDSA (UK List)' so maybe the DRT is not applied. I'll check with my broker what they understand by it.
That's only 5% more than UK & it may not be applied... but it is paid in €s; my broker converts it to £, but of course there is an additional bank charge for the conversion.