Tesco Share Consolidation

walshy147

Hi, I have lots of Tesco share certificates. I used to sell any I wanted by sending them to a stockbroker, because, knowing the original share prices for each certificate  I could calculate the Capital Gain
Now Tesco have Consolidated al of my shares into 1 Certificate !
So if I now send this 1 certificate off to the stockbroker how do I know how many shares I can sell to stay inside the Capital Gains limit ?
Regards

eskbanker

You've always been required to keep track of all purchases/acquisitions so as to maintain an accurate running average cost for CGT purposes, i.e. when disposing of the shares represented by one certificate, the acquisition cost needed for CGT calculations isn't the original purchase cost associated with that specific certificate.  You say you have (rather than 'had') lots of certificates so should be able to perform that calculation of average cost, to be applied to any subsequent sales for CGT calculations?

Thrugelmir

walshy147 said:

knowing the original share prices for each certificate  I could calculate the Capital Gain

I'd suggest that your methodology has been incorrect. Shares have been treated on a pooled basis for some years. 

underground99

walshy147 said:

Now Tesco have Consolidated al of my shares into 1 Certificate !
So if I now send this 1 certificate off to the stockbroker how do I know how many shares I can sell to stay inside the Capital Gains limit ?

Well, presumably you still know how much you paid for all your shares, whether they are all on one certificate or on thirty different certificates.

When you own a whole pile of shares in the same company across lots of different certificates, if you sell some shares, you are not supposed to calculate the gain based on the original cost of specific individual certificates that you sell, ignoring the rest. All of the shares you own that you bought in the past, whether you have them on one certificate or two or ten or fifty certificates, are considered part of the same pool. They are all identical with equal voting and dividend rights and market value.

If you bought 100 at £5 each and another 50 at £4 each and 300 at £1 each, the 500 shares you own in total will have cost you £1000 in total which is an average price of £2 per share, even though you didn't actually pay £2 for any of them individually.

When you then decide you want to sell 100 shares, the cost of the shares sold would be £200, because you know that on average the big pile of shares had cost £2 each, and you calculate your gain or loss against that £200 cost. You don't get to pick and choose and say that you'd like to sell 'all he ones that cost £5 each please' or 'some of the ones that cost £1 each please'. You are simply selling shares out of your big bucket of shares, which are all the same, no matter when in the past you bought them, and you should average out all the costs of everything that sits in that pool of shares. You do that each time you sell. There is no choice of which ones to sell.

So, whether the registrar gave you multiple certificates or consolidated them onto one big one, you still know how much you paid for them. Presumably you still have the records of how much you paid for them, in contract notes or confirmations etc, so the fact that they all got moved onto one certificate should not matter, unless for some reason you threw away the records of what you paid for them.