Ascertaining purchase price for CGT

1spiral

My father gave me some shares about 20 years ago which we transferred to my name. I had a paper certificate but last year I transferred them to my broker for electronic storage in advance of selling them. Now I’m looking to sell them I realise that I don’t have any info to help me ascertain the value at transfer. When I made the transfer to my broker, I advised them that the initial value was £8500 (which I checked at the time using the date on the certificate and historical share prices) but now cannot substantiate that because I have no record of when they were bought.

My question therefore is how do I obtain confirmation of when those shares were transferred to me in order that my CGT declaration will be accurate now that I have no paper record?

I am presuming the registrars would know this but I cannot even locate that information from the web.

The company is Murray Income Trust.

GeoffTF

I would ask the fund manager who the registrar was:

https://www.murray-income.co.uk/en-gb/contact-and-support

35har1old

1spiral said:

My father gave me some shares about 20 years ago which we transferred to my name. I had a paper certificate but last year I transferred them to my broker for electronic storage in advance of selling them. Now I’m looking to sell them I realise that I don’t have any info to help me ascertain the value at transfer. When I made the transfer to my broker, I advised them that the initial value was £8500 (which I checked at the time using the date on the certificate and historical share prices) but now cannot substantiate that because I have no record of when they were bought.

My question therefore is how do I obtain confirmation of when those shares were transferred to me in order that my CGT declaration will be accurate now that I have no paper record?

I am presuming the registrars would know this but I cannot even locate that information from the web.

The company is Murray Income Trust.

If you only sell shares to the value of  CGT allowance you won"t need to know the purchase price

masonic

35har1old said:

1spiral said:

My father gave me some shares about 20 years ago which we transferred to my name. I had a paper certificate but last year I transferred them to my broker for electronic storage in advance of selling them. Now I’m looking to sell them I realise that I don’t have any info to help me ascertain the value at transfer. When I made the transfer to my broker, I advised them that the initial value was £8500 (which I checked at the time using the date on the certificate and historical share prices) but now cannot substantiate that because I have no record of when they were bought.

My question therefore is how do I obtain confirmation of when those shares were transferred to me in order that my CGT declaration will be accurate now that I have no paper record?

I am presuming the registrars would know this but I cannot even locate that information from the web.

The company is Murray Income Trust.

If you only sell shares to the value of  CGT allowance you won"t need to know the purchase price

In this case, the shares have roughly doubled in value over 20 years, so if the starting value was roughly £8.5k, that's going to take about 4 tax years. Whereas it could be done within 3 months if the figures could be confirmed.

Hoenir

1spiral said:

 I advised them that the initial value was £8500 (which I checked at the time using the date on the certificate and historical share prices) but now cannot substantiate that because I have no record of when they were bought.

Unlikely that you'll be challenged for hard evidence. If your tax affairs are straightfoward. 

Using the £8.5k figure. You could realise a gain of £6k this tax year followed by £3k in April from the 6th. Then no CGT is payable anyway. Nothing to declare as they say. 

1spiral

Thanks @GeoffTF I have emailed abrdn.

As @masonic says, they've roughly doubled in that time so if I sold them all today, there would be a liability, I'm just not sure exactly how much, that is what I'm looking to find out. As 8.5K is quite close to this and next years allowance combined, I need to have a more accurate split. If I go for 2/3 sell this year, 1/3 next year and the actual gain is >9K then I have CGT in both tax years to declare. I suppose the next question is if I don't know, how do HMRC know?

Also what would be the tax situation if I transferred all or half to my spouse and then sold?

eskbanker

1spiral said:

Thanks @GeoffTF I have emailed abrdn.

As @masonic says, they've roughly doubled in that time so if I sold them all today, there would be a liability, I'm just not sure exactly how much, that is what I'm looking to find out. As 8.5K is quite close to this and next years allowance combined, I need to have a more accurate split. If I go for 2/3 sell this year, 1/3 next year and the actual gain is >9K then I have CGT in both tax years to declare. I suppose the next question is if I don't know, how do HMRC know?

Also what would be the tax situation if I transferred all or half to my spouse and then sold?

The last question leads to what's likely to be the best solution, assuming neither of you has any other chargeable gains this tax year - if you transfer half to your spouse first then you can each benefit from a £6K allowance, i.e. £12K in total, so that would give significantly more headroom if you have reasonable belief that the actual gain was closer to £8.5K.  Failing that, splitting the sale over the two tax years would cover a gain of £18K....

masonic

I think eskbanker's solution would be the way to go. After transfer of half to the spouse and then each selling 2/3 now and 1/3 in the next tax year, even in the worst case scenario it should fall within the allowance.

1spiral

Presumably transferring half to my spouse doesn't get round the issue of value when I acquired them. Presumably her gain would still be the same as mine i.e. the transfer to her would not reset the CGT starting price?

As an aside, abrdn have advised me of the registrar so I have emailed them.

eskbanker

1spiral said:

Presumably transferring half to my spouse doesn't get round the issue of value when I acquired them. Presumably her gain would still be the same as mine i.e. the transfer to her would not reset the CGT starting price?

Indeed, her acquisition price is the same as yours.

masonic

1spiral said:

Presumably transferring half to my spouse doesn't get round the issue of value when I acquired them. Presumably her gain would still be the same as mine i.e. the transfer to her would not reset the CGT starting price?

If that did happen then you would have crystallised a capital gain so the transfer would be equivalent to you selling them. The purpose of transferring them is to leave the gain uncrystallised for her to utilise her allowance.