CGT on inherited shares

[Deleted User]

Can anyone here offer advise on the above, I want to sell some shares but unsure how it's calculated with regard to value etc

NorthYorkie

You will be treated as having acquired them at their open market value at the date of death. Deduct this from the net sales proceeds and that will be the capital gain.

DE_612183

Do you know what the value of the shares was when you inherited them?

My guess is CGT rules apply to the difference between that value and the value when you sell.

ColdIron

You have a £3,000 allowance, the Annual Exempt Amount. So if you sell a sufficient number of shares to keep your gain within the threshold there should be no tax to pay

https://www.gov.uk/capital-gains-tax/allowances

mta999

they have gone up by 96/78=1.23

if you sell 32000 then deemed value at DOD is 32000÷1.23 = 26106 

gain 32000 - 26016 = 5983

EthicsGradient

[Deleted User] said:

Also would you sell at slightly lower conservative figure to allow for any fluctuations in price as the £5983 doesn't give much wiggle room on the £6000 allowance? 
If I'm reading this all correct that is ?

That would be a good idea. I presume the "78000" and "96000" are approximate figures - it'd be quite a coincidence if 2 valuations worked out to exactly 2 significant figures each and no more.

Maybe the best thing to do is use the cost per share price as the starting point (and use a calculator or spreadsheet, retaining at least 5 significant figures).

Are you selling on an online platform where you can say "give me a quote for selling xxxx shares", and they give a quote and you can accept or cancel it within 15 seconds (or some similar short time)? If so, then look at the current price per share, deduct the cost from that, and then divide £6000 (since this is joint, and we're assuming you don't want the allowances for anything else this tax year) by the difference. That then gives you the number of shares you can sell without hitting the limit.

You can then either just round down to a whole number, ask for the real-time quote, and see if it's higher than the earlier current price you used (or significantly lower) - in which case cancel, and recalculate using the new per share price you know. 

Or if your can't get a real-time price, then yes, it's safer to allow for a bit of change - look for the most up-to-date price you can get, perhaps add 2% to it to allow for fluctuation, and then do the calculation above.

If you have a dealing charge for selling, you can use that in the CG calculation to lessen the liability - insert in the above calculation if it's not too complicated.

Section62

[Deleted User] said:

Can anyone here offer advise on the above, I want to sell some shares but unsure how it's calculated with regard to value etc

Just a check... how did the legator hold the shares before you inherited them?

AIUI if they were in an ISA then they would have continued to benefit from the ISA wrapping until they were transferred to you (or the ISA closed) so the acquisition date for CGT purposes would have been the date of transfer rather than the date of death. (I think, ready to be corrected).

Heedtheadvice

Depending upon which platform the shares are held by on your behalf ( assuming you do not just have old paper certificates for them) then it can be perfect possible to deal virtuly instantly, say over the phone for example and give  instructions to sell a 'fixed ' value of shares ( rather than a number of shares) I.e. your cgt calculation to maximise your free allowance...and have costs included for that sale.

That way you get the max benefit.

That realy depends on the platform holding the shares and what they do for clients, ii, iWeb, HL, and general Stockbrokers do work differently  so you should ask yours what they can do for you.

As an example I did a bed and ISA last year ( to sell shares up to my max CGT liability and then have them effectively transferred into my ISA) . They did not do the CGT calc that you have been advised of above, but accepted instructions to maximise it whilst taking ino account any dealing costs. The latter for  sale is not huge but is to your benefit - twice if there are two sales!

I would suspect you have costs due to the split and maybe not for the inheritance ( specifically relating to the costs to you of inheriting those shares)  but you can take those into account too if applicable. 

All costs associated with the share holding can be taken I to account within reason. Someone might comment if the cost of posting certificates ( secure post?) to the dealer can also be an allowed cost?

Do note however that CGT is not based upon a single sale but the totaliable assets you sell in the financial year and any losses you might have carried forward from previous years....but from what you write that may well not be applicable to you currently.

[Deleted User]

Thank you, I rang and spoke to them and they said I can indeed just request a specified amount in monetary value that I want to sell, and i can do this over the phone.