Can anyone advise what is the best for a normal tax payer to receive the new B shares. I will be receiving about 6000 B shares and don't really know the best way to go. Should I take them all as income in the one go ( and what is the tax I would have to pay) or have them repurchased and treat as capital over a number of years( and again is there any tax liabilities)?. Seems too complicated for me to work out!!
Secondly my Father-in-law, now retired, will be receiving about 5000 B shares what is the best way for him to go??.
If you take the dividend, you will get £18,600 which may well push you into the 40% bracket.
Opinions seem uncertain about the tax treatment of the B-shares for CGT. Some say it is 100% gain, which looks nonsense to me, but who am I to opine?
The simplest approach, which would not be taken, I'm sure by HMRC, is to consider that you have disposed of 1/3rd of your ordinary shares, and so the cost of your B-shares is the original cost (indexed as needed) of those ordinary shares (6,000 in your case). The other way is to assume that you have sold 21% of them, as you get 79 new shares for every 100 old shares. I don't think that is realistic.
Quite how the conversion of 1 ordinary share into 1 B-share creates a 100% gain is beyond me.
I would ask the company secretary for guidance.
As regards your father, he ought to consider the effect on his age allowance.
TJH
|
