Free shares from a building society.

katieknicks

A long time ago I was given 400 free non cumulative preference shares from a building society and then they merged with Lloyds and they became Lloyds non cumulative preference shares. I was sent a notice of redemption last year and received £412.95 from the redemption. Do I need to declare any of this for capital gains tax purposes? And if so what is the gain as they were free? 

CliveOfIndia

If that's the only capital gain you've had this year then no.  The value of the gain is £412.95 - the difference between what you bought them for (£0) and what you sold them for.

But there's a £3000 per year tax-free allowance, so on that basis you won't need to declare it.

Obviously, if you've got any other capital gains from any other sources then this would need to be added in.

wmb194

katieknicks said:

A long time ago I was given 400 free non cumulative preference shares from a building society and then they merged with Lloyds and they became Lloyds non cumulative preference shares. I was sent a notice of redemption last year and received £412.95 from the redemption. Do I need to declare any of this for capital gains tax purposes? And if so what is the gain as they were free? 

Those are regarding Halifax Bank's acquisition of Birmingham Midshires. They ultimately became Lloyds 6.475% non-cumulative redeemable preference shares.

Usually free shares have an acquisition cost of zero so it's likely pure profit but you have an annual CGT allowance of £3,000 so if you have no other capital gains in the relevant tax year you don't need to worry about it.