How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask TonyTax Your Own Question

TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15841
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
13905389
Type Your Tax Question Here...
TonyTax is online now

I bought shares between 1995 and approx 2003 in the American

Customer Question

I bought shares between 1995 and approx 2003 in the American company that I worked for through an employee purchase plan. I'm not sure of the type of scheme but if offered a 15% discount on the start OR end price whichever was lower - so guaranteed to be a discount of at least 15%. Tax was paid on this gain through PAYE in the end month. Each period lasted 6 months so 2 per year and the shares were priced in USD. The total amount sold was around £130k of which I would guess 25 to 50% was gain. I have all the proper figures and dates.
The shares were escheated in 2011. After the process of claiming I got compensation in Mar 2014. Do I just pay CGT as though I had sold them in Mar 2014? Obviously I did not know they were escheated at the time or I would have stopped it. Is that the correct date for CGT or should it be the date there were escheated?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.
Can you tell me how the shares came to be escheated please. How did the compensation compare to the price of the shares at the time you received it or at the time they were escheated. When did you find out what had happened? How much money did you receive?
Customer: replied 1 year ago.
Escheated through mix up of emails / postal details - no contact after 3 years and they were auto escheated by the State of Delaware where the company was incorporated. From memory, I noticed less than a month later, probably more like less than a week. Delaware sold the shares at or around the date of escheatment for the market price. After much bother, the compensation was the amount the shares were sold for more than a year earlier. I don't think there was any interest paid by Delaware but it wouldn't have been much anyway. I received a cheque in USD. The share market price at the time of the cheque was higher than the price compensated (but would also be subject to currency fluctuation? not sure).Thanks,
regards
David
Expert:  TonyTax replied 1 year ago.
Thanks.
Leave this with me while I draft my answer.
Expert:  TonyTax replied 1 year ago.
Hi again.
If you look at CG13139 below it explains what is and what isn't a disposal for CGT purposes:
http://www.hmrc.gov.uk/manuals/cgmanual/cg13139.htm
CG12940 below explains what a capital disposal is:
http://www.hmrc.gov.uk/manuals/cgmanual/CG12940.htm
CG12960 and then CG12948 and CG12952 explain how the time of disposal is determined:
http://www.hmrc.gov.uk/manuals/cgmanual/CG12960.htm
http://www.hmrc.gov.uk/manuals/cgmanual/CG12948.htm
http://www.hmrc.gov.uk/manuals/cgmanual/CG12952.htm
For me, the tax year that the gain should be reported as a disposal for is that in which you received the compensation.
I hope this helps but let me know if you have any further questions.
Customer: replied 1 year ago.
Thanks, I'd seen the first and last cg but not 48 and was looking for confirmation that I'd understood it correctly.CGT - convert each purchase (every 6 months) to gbp at relevant rate then add them all up and subtract that from selling price?
Expert:  TonyTax replied 1 year ago.
Your cost for CGT purposes is the sum of price you paid for the shares and the sum on which you paid tax and NIC. That usually equates to the market value on the day when the shares became yours to keep or sell.
I would use the exchange rates on the date of each event, ie date of purchase, date of disposal. There have been various ways of identifying shares disposed of for CGT purposes since 1995 but, assuming that you were basically adding new shares every six months and only selling enough shares to pay the tax and NIC, you should just pool what you retained and their respective costs and deduct the total cost from the compensation figure to arrive at the gain.
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15841
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
TonyTax and 2 other Tax Specialists are ready to help you
Customer: replied 1 year ago.
Clear. Brilliant, thank you very much.
Expert:  TonyTax replied 1 year ago.
Thanks.

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Previous | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    7088
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    2333
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    524
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2845
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    270
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions