CGT on shares when purchase price unknown

wraighty

Malthusian wrote: »

having their entire inheritance in a single share could wipe two-thirds off the value or more

It wouldn't be their entire inheritance, but thank you for the advice.

atush

wraighty wrote: »

I am not looking to sell yet. Just wondering how to do it when I need to. When the price is right I would want to sell the lot in one go. I paid a lot for some of them so have been waiting to break even at least. That may never happen! I'll most likely leave them to the kids in the end.
I didn't know about estimating values for HMRC so that seems a good option. Thanks to all for your replies.

Selling in one go to make it easy then paying extra tax is just plain silly.

If you paid more for them than they are worth, that i a capital loss- which you can apply to a capital gain thereby reducing it.

Transfer half to your spouse so as to reduce tax in future.

Malthusian

rpc wrote: »

I suspect the answer is usually the same, but for some reason many people, my historical self included, look at it differently when these sorts of schemes (or inheritance) apply.

Some people listen to the stories about Pincher's secretaries at Microsoft and Google becoming millionaires and think that the day they sold or diversified their sharesave scheme would be the day the share price shoots up by 100x. I think there's even an episode of the Simpsons where Homer cashes in his employee shares for a few dollars and the next day the shares rocket and he's the only one not driving a Mercedes into the car park.

Malthusian

wraighty wrote: »

It wouldn't be their entire inheritance, but thank you for the advice.

Legacy, then. Unless it's a million quid inheritance and the BT shares are only a few tens of thousands, it's still an undesirable risk, and the CGT bill is relatively small beside it (especially if managed correctly).

tg99

wraighty wrote: »

Hi,
I have a mixture of BT shares. Some were free shares and others were purchased through sharesave schemes. Unfortunately I do not remember the option prices I paid for them. If I sell them, how should I work out any gains in order to calculate the CGT.
Thanks

Just in case: if your free shares were issued to you under a Share Incentive Plan (SIP) then they may not be subject to capital gains tax.

jennyjj

wraighty wrote: »

True, there is an audit trail but it's been so long that I don't know which sharesave schemes the shares were purchased under. To complicate it, the purchased shares were consolidated onto one certificate with the O2 demerger. Also, if I just sell some of them from my Investment Account, I wouldn't know if they were the shares I made a loss on or otherwise.

Similar position. Shares bought through many schemes: Initial launch, sharesaves, saveshare, Free and matching, Some tranches sold, ( e.g at £12.99) etc. It would be a truly massive chore to even identify the buy and sell dates and prices even without the O2 split. And truth is, after all the digging out of paperwork and subsequent calculations, there could be pretty negligible profit and no cgt to pay.
My approach would be to divest a bunch each tax year at a level that does not need to be reported on self assessment.
I know it's not ideal, but life's too short for working out that sort of mess.

AnotherJoe

What Jennyjj and a few others have said, since you are in no rush, why go through all the hassle of estimating values and filling forms in etc etc?
Just sell in tranches under the reporting limit tax each year. No need to report anything.

Then buy something else with the money, not BT since you'd be unlikely to buy that as a long term investment for the kids (so why keep them just because of the accident you have them now?), and buy inside an ISA.

wraighty

As I read recently, 5 good reasons to keep BT shares: Divi, Divi, Divi......Also if I sell now I will make a loss on them. It's all a gamble I s'pose.

steampowered

Holding the entirety of your investment in one share is very high risk.

If you had a pile of cash, nobody would advise you to put all of that cash into a single share. You would probably be advised to put that money into a fund.

If you wanted to select shares yourself, you would be advised to split your money across several different shares in a few different sectors so that you are diversified.

Also, aren't you paying income tax on the dividends? If you were to sell your BT shares and buy other high dividend shares through a stocks & shares ISA, you'd no longer be paying income tax on the dividends.

Also if I sell now I will make a loss on them

Not a relevant consideration. The shares are today worth a fixed amount. They could go up or they could go down. How the shares happened to be priced in the past doesn't tell you what will happen in future.

AnotherJoe

wraighty wrote: »

As I read recently, 5 good reasons to keep BT shares: Divi, Divi, Divi......Also if I sell now I will make a loss on them. It's all a gamble I s'pose.

Utterly irrelevant ! The loss has happened whether you crystallize it now or not.
You cant pretend you havent lost money by not selling them (well you can, but that would be just sticking your head in the sand)

They are worth, what they are worth now, as steampowered says, what they were worth in the past is an irrelevance. Classic newbie mistake with share dealing hanging on to them to avoid a loss. Would you buy them now? If you wouldn't, sell them.