Demutualisation shares in 1990s/2000

kewa

Hi

Getting to an age where it's time to get my affairs in order.  Back in the 1990s/2000s I received a few demutualisation shares in Norwich Union, Standard Life and Woolwich which I still hold as Aviva, Abrdn and Barclays respectively.  I can't find any documentation I will have received in respect of the demutualisations and more importantly have no record of the base prices of the shares on flotation.

I've spent ages trying to locate the prices with no success.  I'm surprised there isn't a list of these somewhere on the internet.  Can anyone point me in the right direction to where I can get the prices please

Many thanks

Kewa

jimjames

Google brings up this

https://www.heraldscotland.com/news/12081714.alliance-details-procedure-for-share-giveaway/

eskbanker

Norwich Union | Demutualisation | The Guardian states that the launch price for Norwich Union was £3.50.

Strong demand for Standard Life shares | Money | The Guardian has Standard Life opening at £2.30.

Woolwich | Demutualisation | The Guardian puts Woolwich at £2.965.

No idea if these are reliable, but no reason to doubt them....

kewa

Thanks a lot for the info - that's really helpful.  I was hoping for a source that was undoubtedly accurate in the unlikely event of challenge by HMRC if there were a CGT gain but, as you say, there's no reason to doubt these and I'll keep copies of the Guardian articles in case of need.

Thanks again

spider42

If you received the shares for free in the demutualisation, then the base cost for CGT purposes is nil. The market price following the float isn't relevant.

If you actually paid for additional shares, then those shares would have a base cost, but both Aviva and Abrdn have done capital return schemes since demutualisation, so the remaining base cost now will be different to the amount originally paid for the shares.

Notepad_Phil

kewa said:

Hi

Getting to an age where it's time to get my affairs in order.  Back in the 1990s/2000s I received a few demutualisation shares in Norwich Union, Standard Life and Woolwich which I still hold as Aviva, Abrdn and Barclays respectively.  I can't find any documentation I will have received in respect of the demutualisations and more importantly have no record of the base prices of the shares on flotation.

I've spent ages trying to locate the prices with no success.  I'm surprised there isn't a list of these somewhere on the internet.  Can anyone point me in the right direction to where I can get the prices please

Many thanks

Kewa

Is your use of 'a few demutualisation shares' an example of understatement, or do you really mean a few and so you've only got a few thousands of pounds in total value?

If that is the case then you could always sell £6,000 of shares in this tax year and £3,000 in the next without needing to worry about base prices or share reorganisations etc as they would be covered until the capital gains allowance (assuming you don't sell anything else).

Personally I did something like this a few years ago and then invested the sum into somthing that was more diverse and suitable for my current needs.

kewa

spider42 said:

If you received the shares for free in the demutualisation, then the base cost for CGT purposes is nil. The market price following the float isn't relevant.

If you actually paid for additional shares, then those shares would have a base cost, but both Aviva and Abrdn have done capital return schemes since demutualisation, so the remaining base cost now will be different to the amount originally paid for the shares.

Thanks a lot.  Ah, that's the problem with internet research - you find so much conflicting information.

Not only does the nil base cost make sense but would be the safest assumption anyway

Notepad_Phil said:

Is your use of 'a few demutualisation shares' an example of understatement, or do you really mean a few and so you've only got a few thousands of pounds in total value?

If that is the case then you could always sell £6,000 of shares in this tax year and £3,000 in the next without needing to worry about base prices or share reorganisations etc as they would be covered until the capital gains allowance (assuming you don't sell anything else).

Personally I did something like this a few years ago and then invested the sum into somthing that was more diverse and suitable for my current needs.

I have no plans to sell for now, although I have thought about it.  Given the sums involved the amount of any CGT would be fairly small barring any massive uplift in share prices.  My question was more about ensuring I understand the basis of calculating the CGT liability correctly if and when necessary but thanks for the input

nfs_daemon

spider42 said:

If you received the shares for free in the demutualisation, then the base cost for CGT purposes is nil. The market price following the float isn't relevant.

Which, of course, is wholly wrong.  When mutual societies were acquired by companies, it was the members, with their deposits and their debts that they wanted, as they had a value.  No commercial financial institution would have been interested in buying a Building Society with no members.

Accordingly they offered something of value which they had (shares) to acquire something which you had/were/represented - something which became an asset to them.

What HMRC ought to do is to regard their base cost as the closing price, or quarter-up price, on the day that the company became the new owners of all those assets.

What they are doing, of course, is maximising their take, because if they say the base cost was £0 then every penny you sell them for is counted as a gain.

Hoenir

nfs_daemon said:

spider42 said:

If you received the shares for free in the demutualisation, then the base cost for CGT purposes is nil. The market price following the float isn't relevant.

What HMRC ought to do is to regard their base cost as the closing price, or quarter-up price, on the day that the company became the new owners of all those assets.

HMRC has to abide with the tax legislation that's laid down by Parliament. Irrelevant discussing what it ought to do. 

masonic

nfs_daemon said:

What HMRC ought to do is to regard their base cost as the closing price, or quarter-up price, on the day that the company became the new owners of all those assets.

What they are doing, of course, is maximising their take, because if they say the base cost was £0 then every penny you sell them for is counted as a gain.

They would maximise the take by treating the "ought" base cost as income, which would seem to be the necessary side effect of your proposed system.

It's also worth mentioning this is a very old thread, so comments about the £6000 CGT allowance are no longer relevant, two tax years later.

wmb194

nfs_daemon said:

spider42 said:

If you received the shares for free in the demutualisation, then the base cost for CGT purposes is nil. The market price following the float isn't relevant.

Which, of course, is wholly wrong.  When mutual societies were acquired by companies, it was the members, with their deposits and their debts that they wanted, as they had a value.  No commercial financial institution would have been interested in buying a Building Society with no members.

Accordingly they offered something of value which they had (shares) to acquire something which you had/were/represented - something which became an asset to them.

What HMRC ought to do is to regard their base cost as the closing price, or quarter-up price, on the day that the company became the new owners of all those assets.

What they are doing, of course, is maximising their take, because if they say the base cost was £0 then every penny you sell them for is counted as a gain.

People received the shares for free, hence zero base cost.

In the happy days of more generous CGT allowances I doubt many were affected by this.