I have a holding in a fund that I have had, probably, since my 18th birthday. Since then it has changed name, management, structure, purpose etc numerous times. And when you're 18/19/20/21 you aren't always very good at keeping records of all these proceedings, and then you move house etc.
And so I have only hazy idea what it's cost was for CGT purposes. I am almost resigned to holding it until I die so that CGT is not an issue. Except that it's performed dismally in recent years, and pays no dividend at present, which might be nice. I have some ancient contract notes which I *think* refer to this fund, but of course it's a different name, and a different number of units (I think they underwent some sort of conversion at some point), so I'm not sure what's going on.
If I were to sell it, HMRC must have a way of assessing these things. Would it be a matter of getting in touch with HMRC and negotiating a reasonable figure based on the limited paperwork I have? Or maybe I'll just keep it sitting there.
Got a credit card? use our Credit Card & Finance Calculators
Thanks to gvonge,Shelford,GrahamPlatt,gpadsa,Steffers0, for Donating to support the site
CGT when you have no idea of purchase price
-
- Lemon Slice
- Posts: 780
- Joined: November 4th, 2016, 7:18 am
- Has thanked: 212 times
- Been thanked: 491 times
-
- The full Lemon
- Posts: 19114
- Joined: November 4th, 2016, 3:58 pm
- Has thanked: 646 times
- Been thanked: 6789 times
Re: CGT when you have no idea of purchase price
I presume you already use up your annual CGT-free allowance? And are a higher-rate taxpayer and so liable for CGT at 20%?
If there is no way to determine its acquisition cost then I might do one of two things:
1) If nervous put a cost basis of zero so that the gain is the same as the proceeds. Any error is in the taxman's favour, so no chance of getting into trouble.
2) Make a best guess as to cost basis. For instance if it is a UK fund and the UK market is up 500% since you were 18, then use that to work backwards from the current value.
As an aside I have been declaring capital gains for 20 years and have never had a declaration questioned or challenged.
If there is no way to determine its acquisition cost then I might do one of two things:
1) If nervous put a cost basis of zero so that the gain is the same as the proceeds. Any error is in the taxman's favour, so no chance of getting into trouble.
2) Make a best guess as to cost basis. For instance if it is a UK fund and the UK market is up 500% since you were 18, then use that to work backwards from the current value.
As an aside I have been declaring capital gains for 20 years and have never had a declaration questioned or challenged.
-
- Lemon Quarter
- Posts: 1432
- Joined: November 5th, 2016, 10:53 am
- Has thanked: 356 times
- Been thanked: 505 times
Re: CGT when you have no idea of purchase price
Midsmartin wrote:I have a holding in a fund that I have had, probably, since my 18th birthday. Since then it has changed name, management, structure, purpose etc numerous times. And when you're 18/19/20/21 you aren't always very good at keeping records of all these proceedings, and then you move house etc.
And so I have only hazy idea what it's cost was for CGT purposes. I am almost resigned to holding it until I die so that CGT is not an issue. Except that it's performed dismally in recent years, and pays no dividend at present, which might be nice. I have some ancient contract notes which I *think* refer to this fund, but of course it's a different name, and a different number of units (I think they underwent some sort of conversion at some point), so I'm not sure what's going on.
If I were to sell it, HMRC must have a way of assessing these things. Would it be a matter of getting in touch with HMRC and negotiating a reasonable figure based on the limited paperwork I have? Or maybe I'll just keep it sitting there.
I had a similar issue last year.
I started a thread about the issue here:
https://www.lemonfool.co.uk/viewtopic.php?f=49&t=39005
and received helpful advice from fellow Fools.
Unusually for me, I couldn't find the paperwork for all the purchases of shares - this was back in the 1990's.
I did find the purchase document with the price for the final tranche (about 30% of the shares), so used that price for all of them. I explained what I'd done in the calculation submitted to HMRC, which they accepted.
It seems that it's not uncommon for purchase details to be missing, so HMRC accept sensible estimates.
HTH,
Watis
-
- Lemon Quarter
- Posts: 4891
- Joined: November 4th, 2016, 10:15 am
- Has thanked: 620 times
- Been thanked: 2725 times
Re: CGT when you have no idea of purchase price
If the units are 'accumulation' units, then 'cost' needs to include all the notional dividends that were accumulated in your holding and should be treated each year as an addition to 'cost'
Another reason I have never touched unit trusts or funds!
Another reason I have never touched unit trusts or funds!
-
- Lemon Quarter
- Posts: 2115
- Joined: September 2nd, 2019, 10:23 am
- Has thanked: 181 times
- Been thanked: 591 times
Re: CGT when you have no idea of purchase price
What is the rough current value.
Can you share the current name of the holding
How old are you now or roughly how long have you held the holding in it's various guises.
What current tax level are you.
It's possible that you could sell without exceeding the cgt levels depending on the above
Can you share the current name of the holding
How old are you now or roughly how long have you held the holding in it's various guises.
What current tax level are you.
It's possible that you could sell without exceeding the cgt levels depending on the above
Who is online
Users browsing this forum: No registered users and 2 guests