Original share price for Abbey National/Santander

frankiesowner

wmb194 said:

frankiesowner said:

Like many back in the day I was given 100 abbey national shares when it went public. Then it was acquired by Santander. I recently sold the Santander shares but don't know what the original share price was so I can calculate the gain for CGT purposes. Does anyone know what the share price was that I should use?  Thanks. 

Looks like the 100 free shares will be £zero and, to address the comments above, any additional shares subscribed for at the time of demutualisation were 130p.

My bold:

"When free shares are to be issued, as Section 217 TCGA 1992 treats the right to these as an option having no value, no chargeable gain arises on the disposal and indexation allowance is not due. When the free shares are issued, Section 217 treats the investor as acquiring these at nil cost. The normal Capital Gains Tax rules apply when the shares are disposed of. "

https://library.croneri.co.uk/cch_uk/btl/taxbull-it-taxbull-tb04-98-1

https://publications.parliament.uk/pa/cm199899/cmselect/cmtreasy/605/605ap08.htm#:~:text=15.,members%20of%20two%20years%20standing.

Thanks. I didn't subscribe to any additional shares. Sorry to be dumb but it seems the comment above is contradictory?  On the one hand it is saying the 'no chargeable gain arises on the disposal', but then it says 'The normal Capital Gains Tax rules apply when the shares are disposed of'.  If the original price is considered £zero, then on disposal and for CGT the gain would be the total value taken at disposal or is it exempt?

wmb194

frankiesowner said:

wmb194 said:

frankiesowner said:

Like many back in the day I was given 100 abbey national shares when it went public. Then it was acquired by Santander. I recently sold the Santander shares but don't know what the original share price was so I can calculate the gain for CGT purposes. Does anyone know what the share price was that I should use?  Thanks. 

Looks like the 100 free shares will be £zero and, to address the comments above, any additional shares subscribed for at the time of demutualisation were 130p.

My bold:

"When free shares are to be issued, as Section 217 TCGA 1992 treats the right to these as an option having no value, no chargeable gain arises on the disposal and indexation allowance is not due. When the free shares are issued, Section 217 treats the investor as acquiring these at nil cost. The normal Capital Gains Tax rules apply when the shares are disposed of. "

https://library.croneri.co.uk/cch_uk/btl/taxbull-it-taxbull-tb04-98-1

https://publications.parliament.uk/pa/cm199899/cmselect/cmtreasy/605/605ap08.htm#:~:text=15.,members%20of%20two%20years%20standing.

Thanks. I didn't subscribe to any additional shares. Sorry to be dumb but it seems the comment above is contradictory?  On the one hand it is saying the 'no chargeable gain arises on the disposal', but then it says 'The normal Capital Gains Tax rules apply when the shares are disposed of'. 

 If the original price is considered £zero, then on disposal and for CGT the gain would be the total value taken at disposal or is it exempt?

They’re two separate events, the issue of options to the shares and then the shares actually being issued. The shares were actually issued at zero cost and so normal CGT rules apply. So you have no allowable cost to deduct from the sale price. 

Assuming you have no other capital gains from other disposals this tax year you still have your annual CGT £3,000 0% allowance to use against the gain. Do you have a spouse? You could transfer some shares to them and use their allowance as well.

frankiesowner

Thanks. Understood - pity that (ref the CGT). I will be over having disposed of some other shares so looks like I'll have to take the hit.

1spiral

So how does gifting of shares between people work?

I'm aware that gifts between spouse's take on the original purchase cost.

Is that the same between any parties or are some gifts considered 0 cost for CGT purposes?

phlebas192

1spiral said:

So how does gifting of shares between people work?

I'm aware that gifts between spouse's take on the original purchase cost.

Is that the same between any parties or are some gifts considered 0 cost for CGT purposes?

Gifting to someone other than your spouse is a disposal for capital gains purposes. The value of the disposal is the market value of the shares when the gift is made. The recipient acquires the shares at that same market value.