BT Employee Share Ownership Scheme 1984 to 2001 and Capital Gains Tax

dansakman

I worked there for over 10 years. Between 1990 and 2000 I received some free shares each year.  Each such batch was held in trust for 3 years and then transferred to me. 

Now I have sold them I had thought that the base cost for Capital Gains Tax would be the market value on the day they transferred into my name. This is what I have read elsewhere e.g. on HMRC websites. 

However, this website 

https://www.bt.com/about/investors/individual-shareholders/uk-individual-capital-gains-tax-and-your-bt-shares

seems to be suggesting that the base cost is the market value at the point at which the shares were allocated to me and held in trust i.e. 3 years earlier.

There are a lot of former BT employees out there and some must have sold shares. Does anyone know please?

dansakman

Thanks for replying.

Some more information that might help....

This wasn't an option to buy shares. They were "free employee shares". They were not part of BTs "sharesave" scheme which was a separate scheme running at the time. They were not part of any executive share option deal (BT’s Share Incentive Award and Global Share Option Plan). It was an all employee thing. 

Being held in trust for exactly 3 years seems to be part of the T&Cs of the scheme. I left the company in 2000 under voluntary redundancy and didn't get the shares from 1998 until 2001, the shares from 1999 until 2002 and the shares from 2000 until 2003. I had no control of this transfer to my name. If was a function of the trustees of the scheme and was done on the 3 year anniversary of the initial allocation.

dansakman

Yes that's the scheme BT ESOS run from 1984 to 2001. So it predates the "Share Incentive Plan" which was introduced in the finance act 2000. It does sound like I need to believe that BT websites statement about base cost at appropriation date rather than transfer.

It would be nice to find this written down somewhere else so I can make a good case of capital loss on my 23/24 self-assessment.

In practice I've done the maths both ways as I have all the paperwork covering appropriation "Initial Market Value" and evidence of transfer dates and market value at that time. Either way BT represents a nice fat capital loss to offset against my other gains

dansakman

I found this which echoes what you have said

https://www.employment-studies.co.uk/system/files/resources/files/373.pdf

Approved Profit-sharing (APS) and Employee Share

Ownership Plans

APS schemes are share-based profit related pay schemes. They of

a deferred rather than current distribution type. As such, the

reward is not paid instantly but withheld for a period. The

company makes tax-deductible payments to a trust, which buys

shares in the company and appropriates them to scheme

participants. All employees (including part-timers) with five

years’ service must be eligible to participate on similar terms, but

most companies accept those with much shorter service. The

shares must be left in trust for at least two years, and are free of

income tax if left in trust for a further year. The employee pays

Capital Gains Tax (CGT), if appropriate, on the difference

between the sale price and the value of the shares when first

awarded. Under the Finance Act 2000, these schemes are being

phased out. The Inland Revenue will continue to approve

schemes until 5 April 2001, and no further tax-free awards can be

made after 31 December 2002.

APS is to be replaced by Employee Share Ownership Plans

dansakman

Thanks for providing vital clues. Much appreciated. Think I've got enough evidence.