CGT on stock split

danm

Was just about to transfer my Google stocks into a ISA to use this years CGT (first time i have ever done anything like this)... and realised that there was a stock split a few years back...

Presumably i do not treat the cost basis of the new stock as zero for the purpose of CGT?

Do i add the total new holdings together and divide by the original cost base?

thank in advance.

bowlhead99

Effectively you have paid nothing other than the original purchase price, so _all_ of what you are holding now was obtained for that original total cost, and you would need to apportion that total cost over the old and the new shares. If all the shares are the same class, it would be as simple as dividing the original cost base by the revised total number of shares you now have, to find out what they each 'cost' per share.

Then you'd use that cost per share when comparing with the sale proceeds to see what gain you've made on the ones you sold to fund your ISA.

EdSwippet

bowlhead99 wrote: »

If all the shares are the same class, it would be as simple as dividing the original cost base by the revised total number of shares you now have, to find out what they each 'cost' per share.

Working out the cost per share of differing share classes can be fiddly. Google's stock split in 2014 created class A and class C shares, and the split was 50.08% class A and 49.92% class C, so the 'cost' of each split share is in that ratio.

Now, if the OP is moving all their Google shares in one go, and if they have not traded any Google shares since the split, the complications all disappear, and the cost is just the original price paid. Otherwise it's going to be apportioned according to the number of each class of shares transferred. In practice, I'd say the split was close enough to 2:1 that nobody is going to notice the difference, but ten minutes with a spreadsheet should give the exact figures fairly easily.

bowlhead99

Yes, it can be fiddly : my caveat was just that *if* they're all the same class *it would* be as simple as.... Without looking up this specific corporate event

Basically what you end up with after the split has the same total cost as it did before the split, but if one part of your new holding has a higher proportionate value than another part, the cost should be apportioned over the two parts accordingly.

danm

EdSwippet wrote: »

Working out the cost per share of differing share classes can be fiddly. Google's stock split in 2014 created class A and class C shares, and the split was 50.08% class A and 49.92% class C, so the 'cost' of each split share is in that ratio.

Now, if the OP is moving all their Google shares in one go

Unfortunately not moving all in one go but think I understand what you have said.


Using a practical example :
if I original invested £5000 for 10 shares


then following the split I have


Class A = £5000 * 50.08% / 10 = £250.4 per share
Class C = £5000 * 49.92% / 10 = £249.6 per share


is that correct?

EdSwippet

danm wrote: »

... is that correct?

Yes .