Capital Gains Tax for Shares

[Bouleversee]

I was looking at the faqs re bed-and-isa-ing shares on ii's website and I noticed the following:

"What is the bed and ISA 30-day rule?

The 30 day rule means that the sale and repurchase of shares during this period count as the same asset and therefore do not qualify for Capital Gains Tax."

I wasn't aware of this. Is it correct? I have always just listed the sold shares under gains and losses for the year without mentioning repurchasing in an ISA. I won't have lost out because any excess gains could be offset against c/f losses but I live in hope that I might have sufficient gains to reduce the c/f losses to nil one day however so I'd like to clarify this, also so my children know. I don't trade in shares but I had assumed the 30 day rule only applied if one were trading. If correct, does it have to be the same number of shares bought back in the ISA, which is not always the case when doing a b&i?

Edit: I have just done a quick Google of the question which led to Bestinvest's website which said the following:

"Capital Gains Tax with a Bed and ISA
When you sell your investments to begin your Bed and ISA transaction you may have to pay Capital Gains Tax if your gains for the current year exceed the annual allowance (£12,300 for 2020/21). If you make a loss, this could offset any other capital gains you have made this year or in the future."

They can't both be right so which one is? My money is on Bestinvest.





"

[Alaric]

I was looking at the faqs re bed-and-isa-ing shares on ii's website and I noticed the following:

"What is the bed and ISA 30-day rule?
The 30 day rule means that the sale and repurchase of shares during this period count as the same asset and therefore do not qualify for Capital Gains Tax."

"

The answer is correct, but the question is wrong. For "ISA" read "breakfast", there not being a "bed and ISA 30-day rule"

Not that it gives any confidence in ii's proof reading and website validation.

[Bouleversee]

Thanks, Alaric. It was definitely under the Bed and Isa section. I have noticed several mistakes on both the platforms I use.
I wonder if you could help me with this one: My ii ISA still shows Interserve as a 100% loss which distorts the current value of the portfolio and I asked them why it was still there when all other historic events had been removed and asked if it could also be removed. The explanation was that it was delisted but was still trading and I could ask for a share certificate and if they got taken over at some point I would benefit. Another one I have not heard before. None of this was mentioned at the time. I thought they had simply gone bust though I must admit that I do still hear their name mentioned occasionally. Does the explanation make sense to you? I presume I would have to pay something to get a certificate. Would it be worth doing? I suspect not.

When Horizon Group's scheme of arrangement take over was confirmed, they left that on my portfolio showing zero price/value and 100% loss till they received the payment some time later whereas I was making a decent profit from the t/o. That's the way they always do it, apparently, as soon as they are delisted, even though in that case they still had a guaranteed value. Gave me quite a shock when I logged on that day but they got quite shirty when I complained that it didn't make sense.

Apologies. I have gone off topic there. Perhaps I should discuss it on the brokers' board.

[Bouleversee]

Back to cgt, I thought quarter up m.vs. had been discontinued and one used the lower of the closing prices quoted on the LSE website now but HMRC's website says one has to add half of the difference between the two to that other than for AIM shares. I am considering gifting some of my certificated shares and need to know what is correct now. Presumably what it says on the govt. website is correct.

[Charlottesquare]

Thanks, Alaric. It was definitely under the Bed and Isa section. I have noticed several mistakes on both the platforms I use.
I wonder if you could help me with this one: My ii ISA still shows Interserve as a 100% loss which distorts the current value of the portfolio and I asked them why it was still there when all other historic events had been removed and asked if it could also be removed. The explanation was that it was delisted but was still trading and I could ask for a share certificate and if they got taken over at some point I would benefit. Another one I have not heard before. None of this was mentioned at the time. I thought they had simply gone bust though I must admit that I do still hear their name mentioned occasionally. Does the explanation make sense to you? I presume I would have to pay something to get a certificate. Would it be worth doing? I suspect not.

When Horizon Group's scheme of arrangement take over was confirmed, they left that on my portfolio showing zero price/value and 100% loss till they received the payment some time later whereas I was making a decent profit from the t/o. That's the way they always do it, apparently, as soon as they are delisted, even though in that case they still had a guaranteed value. Gave me quite a shock when I logged on that day but they got quite shirty when I complained that it didn't make sense.

Apologies. I have gone off topic there. Perhaps I should discuss it on the brokers' board.

I think original Interserve is in administration, as part of the administration process the "business" was I think sold, this may be why you still come across references, but I think these are references to the business not the company in which you held shares I think it ended up sold to its creditors.

If held outwith an ISA etc (which appears not to be the case in your instance) I would be investigating making a negligible value claim as there are strict time limits making such a claim, the effective date of said claim I believe requires to be whilst the actual share instrument continues to exist (A trap for the unwary who wait too long) I would check what, if anything, the administrators have said, often they publish update statements regarding what is happening.

(Caveat, I am not particularly knowledgeable re them as I sold mine years before the issues arose)

https://www.bbc.co.uk/news/business-47582406

[PinkDalek]

Back to cgt, I thought quarter up m.vs. had been discontinued and one used the lower of the closing prices quoted on the LSE website now but HMRC's website says one has to add half of the difference between the two to that other than for AIM shares. I am considering gifting some of my certificated shares and need to know what is correct now. Presumably what it says on the govt. website is correct.

An HMRC IHT "internal" manual link below but it includes (my bold):

The valuation methods for Inheritance Tax (IHT) were traditionally used for Estate Duty, principally the ‘quarter up’ price of shares. They are also prescribed in statutory form, latterly at TCGA92/S272(3) for Capital Gains Tax (CGT) purposes. From 6 April 2015, the method of valuation for CGT was changed by The Market Value of Shares, Securities and Strips Regulations 2015 (SI 2015/616). The value used for most CGT purposes is the figure one-half of the way up from the lowest to the highest closing prices of the day.

However, these regulations do not apply to IHT so the value used is still the quarter up price at the date of the chargeable event. ...

https://www.gov.uk/hmrc-internal-manuals/inheritance-tax-manual/ihtm18093

Edit: If conceivably a Capital Loss is involved, beware of the special rules for "Where an asset is sold to a connected person at a loss, the normal loss relief rules do not apply. The loss may only be offset against gains arising on future disposals to the same connected person whilst they are still connected (TCGA 1992 s.18(3), (4))" extracted from CGT: Connected Parties and Asset Valuations https://www.taxationweb.co.uk/tax-articles/general/cgt-connected-parties-and-asset-valuations.html. At a loss would include for nil consideration as in a gift I believe.

[scrumpyjack]

For quoted shares I am sure you would not have a problem simply using the quoted closing price as per the next day's newspaper.

But if you are concerned you can use the HMRC Post-transaction Valuation check form
https://www.gov.uk/capital-gains-tax/market-value

[PinkDalek]

... But if you are concerned you can use the HMRC Post-transaction Valuation check form
https://www.gov.uk/capital-gains-tax/market-value

Which I believe I've read somewhere or other is taking many more moons than the "allow at least 3 months for HMRC’s response" to get a resolution, at least being the relevant wording.

That having been said, for listed shares it is most unlikely to be the appropriate route.

[Bouleversee]

Thanks to all and thanks to PD for reminding me about clogged losses. As I have quite a few losses at the moment and it's probably more bother than it's worth, I think I'll forget about gifting certificated shares and just get rid of some of the shares in my dealing account either by selling or bed-and-isa and also do the same with some certificated ones via one of my platforms. In that case, it is presumably the date they sell them and the price they get for them which are relevant and not the date on the transfer form. Makes life simpler. Difficult to know which of the shares it's worth transferring. Several I have transferred in the past are now looking very sick and no signs of a dividend in the near future so I'll concentrate on the ones who are likely to pay.

The LSE seems to have changed its website rather dramatically and I couldn't find any way of seeing historic share prices. Can anyone tell me how to do that?

[scrumpyjack]

Yahoo have free historic prices going back a long way
Eg for Shell B

https://finance.yahoo.com/quote/RDSB.L/history?p=RDSB.L

[Bouleversee]

Thanks. I just wanted to check how I calculated the m.v. on a holding I had gifted. I'm pretty sure I did what you suggested in your previous post: mid market value at close. We'll see whether there is any query when my return gets dealt with. I did the calculations at the time of the disposal which was in Dec. 2019, too far back for me to remember precisely.

[Bouleversee]

And too far back for Yahoo Finance as well, it would seem.

[PinkDalek]

And too far back for Yahoo Finance as well, it would seem.

That confused me too, as the format has changed, but look at Scrumpy's link again. At the top you should see Time Period: Feb 10, 2020 - Feb 10, 2021. That can be changed (with difficulty).

[Bouleversee]

Why didn't I spot that? I really am useless! Anyway, it would appear that I used the close price quoted which is presumably the mid price so I should be OK, shouldn't I? I see that it gives an adj. price in the next column. No idea what that's all about.

What would I do without you folks to hold my hand? Thanks again.

[PinkDalek]

Why didn't I spot that? I really am useless!

Am I permitted to say nonsense? I nearly missed it too, scrolling down & expecting to see more & more. At least I think that is how I recall Yahoo Historical prices or maybe it was to see a page 2 etc.

Anyway, it would appear that I used the close price quoted which is presumably the mid price so I should be OK, shouldn't I? I see that it gives an adj. price in the next column. No idea what that's all about.

We don't know where you are looking, without a link, but re the adjusted prices usually partially explained by *Close price adjusted for splits.**Adjusted close price adjusted for both dividends and splits which you should be able to see at the foot of each page.

Is there any reason you can't trust what you did back in December 2019 or shortly thereafter? I have a feeling you may well have discussed it at the time of the gift(s), although that may have been a previous one.

You could always look at the relevant charts at the London Stock Exchange, for example, to compare with what you used. Here's BP's https://www.londonstockexchange.com/stock/BP./bp-plc/company-page, which you can change to 5 years back which should cover your required time scale, once you've found the right page for whichever shareholding you are talking about. Their search for quotes etc is to be found top right.

[Bouleversee]

The adj. price was next to the closing price on the Yahoo site. I 'm none the wiser even after your explanation but will assume it is irrelevant to the shares I gifted. It was the comment I had read on HMRC's site about the change from 2015 which made me wonder what I had done. Somewhat OCD to keep checking but that's because my memory and cognitive function are not what they used to be. I don't need to check any of the other calculations as MVs didn't apply.

I couldn't find the historic prices on the LSE site or maybe at that time I was looking for more details than the mid price at close. As I said .... However, I don't need to now.

I wonder how long HMRC will be taking to deal with paper returns and how many other people were prevented from filing online because of the glitch in their system. I overestimated the tax due so am due a refund.

I know I could get an accountant but as Pip's Mum said, one needs to understand the rules in order to decide what to do.

[scrumpyjack]

Per Yahoo, the adjusted price:
"Adjusted close is the closing price after adjustments for all applicable splits and dividend distributions. Data is adjusted using appropriate split and dividend multipliers, adhering to Center for Research in Security Prices (CRSP) standards."

[Bouleversee]

Yes, I read that, Scrumpy, but I'm afraid it conveys nothing to me in practical terms. I don't even know what a split is outside cookery terms. Don't worry. I've managed to get by all these years without knowing. Unless it has any relevance to the m.v. one puts down on one's tax returns I think I can get by without.

[PinkDalek]

The adj. price was next to the closing price on the Yahoo site. I 'm none the wiser even after your explanation but will assume it is irrelevant to the shares I gifted. ... I couldn't find the historic prices on the LSE site or maybe at that time I was looking for more details than the mid price at close. ...

Perhaps I wasn't clear but we don't know what specific company or companies are involved, so were unable to see where you were looking. Other than at Yahoo Finance and the London Stock Exchange (assuming you are not referring to London South East aka LSE!).

The splits mentioned are where, for instance, there's been a two for one, so you end up with twice*** the number of shares you originally held (*** unless I'm confusing that with the system in the USA). I haven't looked but I think Yahoo Finance take that into account and may adjust the historical figures. Thus you may conceivably have picked up the incorrect MVs when looking backwards but that's only a possibility. That is why I suggested you tried the London Stock Exchange charts again but I've no recollection if they do similarly.

Yahoo Finance also, possibly, adjust for dividends (as per scrumpyjack's extract) but I simply can't recall what they do specifically.

I think I'll leave it there, other than to repeat Is there any reason you can't trust what you did back in December 2019 or shortly thereafter?(failing that, back issues of the FT are sometimes used but I know what you'll say). Given your However, I don't need to now. I think you are saying you'll leave it where you were/are.

As for OCD, well understood. A number of us may well have such a condition.

[Bouleversee]

The disposal price I put down on my computation for Greggs is the mid-price at close but I noticed the adj. price next to it when I checked it on Yahoo yesterday and it aroused my curiosity.

https://finance.yahoo.com/quote/GRG.L/h ... Close=true

There haven't been any splits since I bought them so if the mid-price at close is still OK to put down, there should be no problem. As you suggest, enough already!

BFN.

Lorna