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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I bought shares between 1995 and approx 2003 in the American

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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?
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 2 years 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,
Leave this with me while I draft my answer.
Hi again.
If you look at CG13139 below it explains what is and what isn't a disposal for CGT purposes:
CG12940 below explains what a capital disposal is:
CG12960 and then CG12948 and CG12952 explain how the time of disposal is determined:
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 2 years 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?
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.
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Customer: replied 2 years ago.
Clear. Brilliant, thank you very much.