Demutualisation shares

AskAsk

I got given Halifax demutualisation shares, which of course has lost value.  I am thinking of selling them and wonder by chance, if anyone know if I can claim a loss on them because of the reduced value, or would I be subject to capital gains as they were given to me as free shares??

eskbanker

My understanding is that the acquisition value for CGT purposes is nil, therefore it's a gain rather than a loss.

AskAsk

eskbanker said:

My understanding is that the acquisition value for CGT purposes is nil, therefore it's a gain rather than a loss.

i found this article on HMRC but it is a bit too much for my poor head to understand.  it talks about the deposit value of your account at demutualisation, but that is some serious data as i don't have a record of the account with the halifax at the time!

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg13028

eskbanker

I believe that https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg56820 is the more applicable reference, and in turn the underlying legislation: https://www.legislation.gov.uk/ukpga/1992/12/section/217

AskAsk

eskbanker said:

I believe that https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg56820 is the more applicable reference, and in turn the underlying legislation: https://www.legislation.gov.uk/ukpga/1992/12/section/217

so i would be paying capital gains tax on the shares sold as i got them for nothing rather than loss from their initial launch price.  i did think that was the case but thought best check.

thanks.

eskbanker

AskAsk said:

eskbanker said:

I believe that https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg56820 is the more applicable reference, and in turn the underlying legislation: https://www.legislation.gov.uk/ukpga/1992/12/section/217

so i would be paying capital gains tax on the shares sold as i got them for nothing rather than loss from their initial launch price.  i did think that was the case but thought best check.

thanks.

You'd only actually be paying CGT if your total capital gains from this, plus any other chargeable gains during this tax year, exceed your annual threshold of £12.3K, and if there is any danger of that, you could always look into staggering disposals over multiple tax years....

AskAsk

eskbanker said:

AskAsk said:

eskbanker said:

I believe that https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg56820 is the more applicable reference, and in turn the underlying legislation: https://www.legislation.gov.uk/ukpga/1992/12/section/217

so i would be paying capital gains tax on the shares sold as i got them for nothing rather than loss from their initial launch price.  i did think that was the case but thought best check.

thanks.

You'd only actually be paying CGT if your total capital gains from this, plus any other chargeable gains during this tax year, exceed your annual threshold of £12.3K, and if there is any danger of that, you could always look into staggering disposals over multiple tax years....

yeah i know.  the shares are only worth £200 and so i thought it would be an ideal opportunity to sell them and claim a loss until i remembered that i got them for free so technically i only lost a notional loss.

i will just keep them for now as this tax year, i have already exceeded the capital gains allowance, so that was why i thought it would be the perfect opportunity to claim some loss, but would appear there is no loss that i can claim.