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Correct , the holding is 368 shares in Verizon. No cash received.
Hi again.I've used the information from the Vodafone site here for my calculations.The Vodafone shares cost £18,095. This has to be divided between the new Vodafone and Verizon shareholdings in proportion to the respective share values on the day the restructuring was officially completed, 24 February 2014. The Vodafone shares were worth £18,517 on that day and the Verizon shares were worth £10,404 on that day. The total value was £28,921 (64.03% Vodafone and 35.97% Verizon).Therefore, the Vodafone shares have a revised cost of £11,586and the Verizon shares have a cost £6,509 total £18,095. So, if your son sold his Verizon shares for £10,166 he would make a gain of £3,657. That would leave £7,243 of the annual CGT exemption unused.The Vodafone page I gave you a link to does mention a "return of value" to the shareholders by Vodafone which was due to be made on 4 March 2014 and which would affect my calculations if your son was entitled to any. You can read about that here under the heading "Tax questions for UK and Irish shareholders".I hope this helps but let me know if you have any further questions.
Thanks, XXXXX XXXXX was helpful.
In reply to your query about " return on value"I see that the following cash payments have been received as below, between 28 February and 5 March.
Vodafone return of value-capital payment £4125.82 p Vodafone group plc: cash fractions from consolidation 0.88p
Vodafone scheme: there is on fractional payout £5.56
These total £4132.26 p
in your email you state the gain on the sale of the verizon shares could have created a gain of £3657.Would I therefore be right in saying that , with the cash received, the new gain is £7789 (3657 + 4132) , which leaves £3111 remaining of the annual CGT exemption ?
Look orwar to hearing from you.
I've had a look at the Vodafone/Verizon deal and how the cash payment affects the calculation of capital gains. Normally, any cash payment is treated as capital. In this case, however, shareholders were asked if they wanted to receive the cash as a capital payment or as an income payment. If they wanted it as a capital payment, they would have needed to put an "X" in Section 2 of the Form of Election document. Leaving it blank would mean the cash would have been paid as income. Which option did you take? See the articles here and here.
Thanks, XXXXX XXXXX took the cash as capital. So I suspect that my previous calculation that the total gain is therefore is correct. Please confirm or otherwise comment.
Hi again.I've done a calculation of the capital gains position for a situation where the £4,132 is treated as a capital repayment as follows:CASH AS CAPITAL REPAYMENTCost of 7,639 Vodafone shares: £10,137Cost of Verizon shares: £5,696Cost of £4,132 cash: £2,262Potential gain on Verizon sale at £10,166: £4,470 (£10,166 - £5,696)Actual gain on cash: £1,870 (£4,132 - £2,262)
See the "James" example under the heading "Tax Questions For UK And Irish Shareholders" here.
Many thanks. I have marked your work excellent