ESPP and RSU - Section 104 price calculation

sausage_time

I work for a US company and have US$ shares acquired through ESPP and RSU schemes.  Some I have sold, some I have held onto.  For each acquisition I have tracked the "Section 104" pool price so that I can asses each disposal. I have just realised that I have been tracking this price in dollars which is (probably) not the right thing to do.  Should I go back and recalculate at the prevailing FX rate for each of the (numerous!) transactions? 

RacingDriver

[Deleted User] said:

Also, I assume that you have no employment-related restrictions still attaching to any of those shares. If you do, the normal pooling rules are tweaked. 

Can you elaborate a bit more on this.  Say I acquire shares of my employer on a monthly basis, and they have to be held for three years before I am free to sell them.  How would this affect the pooling rules?

RacingDriver

[Deleted User] said:

Have a look here: https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg56348

Thanks, I understand now that shares leave the restricted pool to join the unrestricted pool at the average cost of the shares in the restricted pool.

If shares are acquired in a foreign currency, I convert to GBP using the relevant monthly FX rate here https://www.trade-tariff.service.gov.uk/exchange_rates.

Is the average cost of the shares when leaving the restricted pool to join the unrestricted pool based on the average of the GBP acquisition values, or do I need to first average the foreign currency acquisition cost then convert to GBP?

Then when I sell the shares I convert the sale price to GBP then subtract the average GBP acquisition cost (not foreign currency acquisition cost) to calculate CGT?

RacingDriver

If a new restricted purchase is made on the same day as a previous purchase becomes unrestricted, does the average cost of the restricted pool include the purchase on the same day?

RacingDriver

[Deleted User] said:

In my straightforward example though you would not, if you bought restricted shares monthly, have a single restricted share pool since restricted shares bought each month would have different restrictions to any other month's acquisition.

Looking at the CGT manual all restricted shares would form a single pool despite being acquired on different dates.

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg51580

Shares that have the same restriction that applies for different periods form a single pool. For example, shares are issued to an employee that cannot be sold for 3 years; they are issued at 6 monthly intervals so the restrictions end at various dates. All the shares that are for the time being subject to the restriction should be treated as a single holding.