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TonyTax
TonyTax, Tax Consultant
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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In Feb 2014 my wife and jointly had 5042 old Vodafone shares

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In Feb 2014 my wife and jointly had 5042 old Vodafone shares bought 19.10.11 @ 172.68p each.
These were consolidated on the 19th Feb 2014 i.e. 6 for each 11 leaving us with 2750 new VOD shares@ 242p. We opted to have this treated as Capital not Income.
We received a cash payment of £1490.96
We received 132 Verizon shares which were sold immediately for £3662.02.
We received a Verizon fractional amount of £17.10.
Can you calculate the CGT due attaching a copy of the calc for my submission to HMRC?
what would be be your charge for this?
Sebert Lane.
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

I'll do some calculations for you. It will take a while so please bear with me.
Customer: replied 2 years ago.

Sorry. My opening statement should have read "my wife and I"

Sebert.

Expert:  TonyTax replied 2 years ago.
Thanks. I'm working on the figures now. Don't bother responding to this post as I will need to respond myself again. You will be sent an email when l have posted my answer.
Customer: replied 2 years ago.

What is the "More information" that you require please?

Expert:  TonyTax replied 2 years ago.
I don't need more information. I said I'm working on the answer and that you did not need to respond to that post. If I had posted the acknowledgement to your post as an answer, the system would be asking you to rate it so as it wasn't an answer I had no choice but to post it as an "Info Request". I have almost finished draftiong my answer. Please ignore any emails from just answer asking you to provide more information.
Expert:  TonyTax replied 2 years ago.
Hi again.

There is alot of information on the Vodafone/Verizon demerger on the Vodafone website but all the information you really need to apportion the cost of the original Vodafone shares between the new holding of Vodafone shares, the holding of Verizon shares and the cash received as capital is here and here.

The original Vodafone holding cost £8,706. The new Vodafone holding was worth £6,666 and the new Verizon holding was worth £3,732 after the demerger. The combined value of the new holdings was £10,398. The cash received from Vodafone was £1,490. The total value was, therefore, £11,888. The cost is apportioned as follows:

CASH £1,490

(£1490 / £11,888) X £8,706 = £1,091. The gain on the cash is £399 (£1,490 - £1,091), £199.50 each.

2750 VODAFONE SHARES

(£6,666 / £10,398) x £7,615 (£8,706 - £1,091) = £4,882

132 VERIZON SHARES

(£3,732 / £10,398) x £7,615 (£8,706 - £1,091) = £2,733. The fractional cash received of £17 is deducted from £2,733 to leave a base cost of £2,716. As the shares were sold for £3,662, you made a gain of £946, £473 each.

I hope this helps but let me know if you have any further questions.
Customer: replied 2 years ago.

Thank you.

Just to be quite sure. Am I correct in my understanding that we each made a capital gain on the cash of £199.50 and a capital gain each on the Verizon shares of £473. Also that there is no capital gain to show on the 2750 consolidated shares as we still hold them?

Expert:  TonyTax replied 2 years ago.
That's correct.

The cash will give rise to a gain or a loss most of the time. In some circumstances, it can be deducted from the cost of the remaining holding.

You won't incur a CGT charge on the Vodafone shares unless you make a taxable gain when you sell them. Of course, you each have the annual CGT exemption to use.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15886
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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