capital gain on first active shares

D

dalo

Guest
Just received demand for capital gains tax on free First Active shares. Purchased 2760 eircom shares at £3.07. I still hold the Vodafone part of these shares. How to I claim relief on the loss in these shares. Will the Revenue Commissioners ask me where I got the money to buy the eircom shares. I have various documents but don't seem to have the original Compushare document for the purchase of the shares. Can I get a replacement.
 
You bought 2,760 shares @ €3.90 = €10,764
You probably also got 110 free loyalty shares (1 for every 25 held) giving a total holding of 2,870.

For this you would have got 1,358 (2,870/2 x 0.9467) shares in Vodafone and a payment of €3,831 (2,870 @ €1.335) from Valentia.

Your Eircom losses are €797 (€3,831 less 43% of €10,764). You subtract this from your First Active gains.

Capital gains is a self-assessment tax. It's up to you to tell the taxman how much you owe. He's either accept your figures or select you for audit.
 
CGT

Thanks very much Moneybags. It's great to have friends in high places.
 
CGT

I don't think that it's as simple as above on at least two counts:

(a) some or all previously incurred capital losses (e.g. eircom) must be set against the FA capital repayment in 2003 before one's 2003 annual CGT allowance can be used - see here:

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(b) some of the cost of the purchased shares MAY also need to be set against the capital repayment - at least according to the Revenue's letter to former shareholders although I believe that under the FIFO rules one can elect which batch (e.g. free or purchased) shares acquired on the same day can be set against each capital event - i.e. the information here seems to conflict with that in the Revenue letter:

[broken link removed]

Unfortunately the FA CGT calculations can be more involved that they might seem at first glance particularly when issues such as free and purchased shares acquired at IPO, B&B repricing of certain shares and previously incurred capital losses enter the picture... :\



I'm still trying to figure my own out at the moment having previously filed a return and payment which turns out to be incorrect...
 
CGT

> (b) some of the cost of the purchased shares MAY also need to be set against the capital repayment

I was assuming that some FA shares were also purchased at IPO in addition to the "free" windfall shares received. This may not be the case for all shareholders.
 
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