Partially defer capital gain from a compulsory share sale into next year?

fredsinbed

A company I own shares in is being acquired and all shares are being 'sold up' at the company's sale price. This is due to happen before the 5th April, which would mean I have to sell all my shares in one go, thus benefiting from only one year's capital gains tax-free allowance.

Prior to the sale being announced, I had planned to sell shares over two tax years to make use of the 2012-2013 and 2013-2014 allowance, but this won't be possible if I'm forced to sell before April.

Is there any way to defer some of the capital gain and make use of two years' allowance?

For example if I invest some of the proceeds in an ISA or other financial product, would any of these options count in reducing my effective capital gain in the '12-'13 tax year?

I have asked if I can be given shares in the acquiring company instead of cash, but apparently this is not possible, even though both companies are currently publicly traded.

Later in 2013 I intend to buy a house. Is there any other legal means to reduce my tax bill given these circumstances? It seems unfortunate that my taxes will be substantially higher solely because the timing of the acquisition prevents me from spreading the gain over two years.

Thanks in advance,
Fred.

taxguru

Can you transfer part of the investment to your spouse??

fredsinbed

Unmarried unfortunately

CLAPTON

presumably you are basing your tax liability on the GAIN or Profit on the shares rather than simply their value (assuming you paid something for them)

fredsinbed

Thanks for the replies...

Re the purchase price, I think I was effectively gifted them, although I'm not sure how to be 100% certain. I never expected them to be worth anything so my memory of these very old transactions is vague. I was given the shares at a very early stage in the company's formation. I did not buy the shares, but I vaguely remember paying income tax on them at the time as an employee of the said company, based on what I think was a substantially lower value.

If I was awarded the shares and paid tax on them, is this the same as buying them at a particular price?

Chronologically speaking, the company was acquired 3 years ago, then about 2 years ago the acquirer floated on the stock market before next month being set to be acquired once again.

I'm not sure how best to work out what (if applicable) purchase price I could state.