Capital Gains Tax. (CGT) and Share consolidation

james.wardle

Hello.  I recently inherited and then sold some Tesco shares. 

In between the date of death and the date I sold the shares there was a share consolidation, which paid a special dividend.   

I understand the consolidation is not considered an event for CGT

Could you help me calculate the loss for CGT?  I've simplified the numbers a bit to make it obvious,  I'm not clear how the consolidation affects the CGT

• Inherited. 19 shares at £2.50 = 47.50
• Consolidated to 15 shares at £2.50 = 37.50
• Sold 15 shares at £2.20 = £33.00

1. Is the loss for CGT £47.50 - £33.00 = -£14.50
2. or is the loss for CGT  £37.50 - £33.00 = -£4.50

Thanks

James

Jeremy535897

1, subject to an unlikely outcome on share fractions. See https://www.tescoplc.com/media/756913/shareholder-circular-incorporating-the-notice-of-general-meeting.pdf (Part II, section 10).

james.wardle

thanks, Jeremey for the feedback.   I think the important bit of the doc you pointed me to is:

 "The New Ordinary Shares which replace a Shareholder’s holding of Existing Ordinary Shares (the New Holding) as a result of the Share Consolidation will be treated as the same asset acquired at the same time as the Shareholder’s holding of Existing Ordinary Shares was acquired;"

In the case of the example above the loss for CGT is -£14.50  as the CGT loss is based on the total value of the holding and not the unitary value of a single share.

Jeremy535897

Yes, that's right.