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CGT when you have no idea of purchase price

Practical Issues
Midsmartin
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CGT when you have no idea of purchase price

#656478

Postby Midsmartin » March 28th, 2024, 5:22 pm

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.

Lootman
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Re: CGT when you have no idea of purchase price

#656483

Postby Lootman » March 28th, 2024, 5:48 pm

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.

Watis
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Re: CGT when you have no idea of purchase price

#656485

Postby Watis » March 28th, 2024, 5:51 pm

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

scrumpyjack
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Re: CGT when you have no idea of purchase price

#656488

Postby scrumpyjack » March 28th, 2024, 6:02 pm

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!

Gerry557
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Re: CGT when you have no idea of purchase price

#656495

Postby Gerry557 » March 28th, 2024, 6:41 pm

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


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