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CGT Questions

Can anyone please enlighten me on some questions regarding CGT:

  1. Acquisition cost - LIFO accounting rule.

I know when I sell shares, I should start with the most recent purchased price to calculate acquisition cost. Suppose I have bought shares of the same company from two different brokers, at different times and prices, and they are kept separately in the brokers' nominee accounts. If I sold the shares held with the first (earlier) broker, which purchase price should I use? The price paid to the second broker?

  1. Capital loss within ISA.

I know capital gains made within an ISA need not be declared, but what about capital loss? Can I claim it?

  1. Bonus shares.

This is not a CGT question. Should bonus shares be regarded as share split or scrip dividend? The bonus shares are paid to everyone, proportionate to their holdings (i.e. my share of the company remains the same), in addition to dividend, and the share price fell after the award. Should they be declared, and if so, how should they be valued?

Thanks in advance!

TG

Reply to
tg
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Except where the bed and breakfasting rules apply.

I believe 1 and 2 do not do the taxpayer any favours. For (1), I would hope the guidance notes for the CGT form, and any external document they reference, are clear enough. For (2), all I can say with certainty is that I have never claimed any such relief and would not expect it to be allowed.

The prospectus for the bonus issue should tell you what the company believes to be the tax status. If in doubt, the HMRC has a booklet that summarises their rules. The full rules are/were also on their web site. If still in doubt, ring your own tax office.

Reply to
David Woolley

The brokers are irrelevant. There are new rules regarding shares purchased pre and post 6 April 2008 - see note 13

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r2007/pbrn17.pdf

No

Share split.

It depends on whether they are the same or different class. See above regarding the new rules.

Reply to
PeterSaxton

Thanks so much guys for your replies. They're most helpful!

Best regards,

TG

Reply to
tg

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