Employer investment private equity

ftg

I invested a small amount in my employer a few years ago and the money was split into 5 separate investment entities. The business was sold last year and I received a return on 3 of these entities and got the monies physically back, for the other 2 entities the shares in them were reinvested again by way of conservation (in the exact same 2 entities). The value at the point of reinvestment has grown from initial investment. The first 3 on which I have had a gain and taken the money I know CGT is due, am I right in thinking that on the final 2 CGT will also be due and it's not just a transfer of the shares and therefore no taxable event has occured?

masonic

Could be either depending on the type of scheme, whether there is a company reorganisation, and the finer details of the transaction. Your employer should be able to provide information (but not advice).

ftg

[Deleted User] said:

ftg said:

I invested a small amount in my employer a few years ago and the money was split into 5 separate investment entities. The business was sold last year and I received a return on 3 of these entities and got the monies physically back, for the other 2 entities the shares in them were reinvested again by way of conservation (in the exact same 2 entities). The value at the point of reinvestment has grown from initial investment. The first 3 on which I have had a gain and taken the money I know CGT is due, am I right in thinking that on the final 2 CGT will also be due and it's not just a transfer of the shares and therefore no taxable event has occured?

You need to explain a bit more about what happened with the final two shares.  Presumably your employer has told you how they were taxed under the transaction?

More information is needed because "reinvestment by way of conservation" is not really a commonly used UK term.  If, for example, you had 10 A shares in Company A and these were converted into B shares in Company A then that is likely to be a 'nothing' for CGT.  However, there are geeky rules that mean that there might be employment income tax if (i) your A shares originally had a right to convert into B shares at some future date when you got them, or (ii) the value of the B shares was more than the value of the A shares.  

It's an investment in a European company, translation differences I guess. The 2 entities in which I have not had any funds physically returned to me - the number of shares I had from the initial investment have been reinvested again, in the exact same entities. However, the value attached to those shares has grown so my reinvestment amount from those shares is higher even if the number of shares is the same. I have on a piece of paper the amount reinvested. I am now wondering whether it was a taxable event upon reinvestment (on the gain on the amount reinvested) or is it a taxable event if/when the shares are sold next time around (and at that point the taxable gain is the value realised less the very original investment)?

DRS1

Why isn't your employer telling you the tax implications of what has happened?  This sounds like an employee incentive scheme of some sort and conceivably there is or was some income tax due somewhere along the line.