1965 and 1982 Holdings

dragonjim2001

Hi,
I am helping my elderly mother sort out Capital Gains implication on selling some shares that she bought back in 1962: I understand that their were two 'Make Up' events in April 1965 and April 1982 but it has been very difficult trying to find out any information about them (including on government websites, where most pertinent documents seem to have been archived, but no one can tell me how to get hold of them).  My main questions are:

1. What actually happened in the April 1965 event? My assumption is that all holdings prior to that date were combined into one holding (and then callled the 1965 Holding).

2. What was the reason for the April 1965 event?  My assumption is that Capital Gain rules changed at this point and that any shares in a certain stock purchased after that date were treated differently to those purchased before but can find no details on any difference.

3. When holdings were combined in March/April 1982, was the 1965 Holding included in this new 1982 Holding?  And if not, and if it remained separate, was it entitled to Indexation cost allowance in the period up to 1998 as was the 1982 Holding?  My assumption, until recently, has been that the 1965 Holding DID become part of the new 1982 Holding, but a tax document on the Government website I have read recently has led me to doubt that assumption.

4. With the 1982 event, there was an option to either use the price as of 31st March 1982 or the extant allowable costs; was the same option available for the 1965 Holding?

My thanks in advance for any help you can offer.

DRS1

I am probably not following the questions but wasn't 1965 when CGT was introduced?  And 1982 was when they introduced indexation?

Haven't they now abolished indexation?  and taper relief?

I think 1982 values apply to any holdings she had on 31 March 1982.  I think the option to pick your base cost referred to in q4 was abolished in 2008.

You have probably read this already but there may be more detail in here

CG16700 - Introduction - HMRC internal manual - GOV.UK

phlebas192

1 & 2. 1965 was when CGT was first introduced.I don't know what the base cost was at that point but subsequent events mean it does not matter.

3 & 4. 1982 was when indexation was introduced but the indexation only applied from the 1982 value.

Of more importance to you, in 1988 all assets owned from before 1982 were rebased for CGT purposes such that their acquisition cost was deemed to be the market value on 31/3/1982. That is the value you now need to use. Next problem is trying to find out what that was - I doubt if many sources have data going back that far but the company's investor relations should be able to help.

dragonjim2001

Thank you for your replies, they are very helpful.

The problem I had was that there were transactions during the period 1965 to 1982 which would have affected the base costs; however, as you correctly state, that is no longer an issue as the unit cost on 31st March 1982 is the one that must be used to calculate allowable costs for all transactions after April 2008 - I believe there are sites out there with details of these values and, from experience, there will be a charge, but at least they should be obtainable.

The only thing I am still unsure of is whether, when the 1982 Holding was formed, whether the old 1965 Holding was incorporated in it.  I know that it is a moot point now, and will assume that it was, unless anyone knows any different.

Thanks again for your help.

wmb194

dragonjim2001 said:

Thank you for your replies, they are very helpful.

The problem I had was that there were transactions during the period 1965 to 1982 which would have affected the base costs; however, as you correctly state, that is no longer an issue as the unit cost on 31st March 1982 is the one that must be used to calculate allowable costs for all transactions after April 2008 - I believe there are sites out there with details of these values and, from experience, there will be a charge, but at least they should be obtainable.

The only thing I am still unsure of is whether, when the 1982 Holding was formed, whether the old 1965 Holding was incorporated in it.  I know that it is a moot point now, and will assume that it was, unless anyone knows any different.

Thanks again for your help.

What's the name of the company?