captial gains tax on redeemable shares

[noel 2006]

Does anyone know the correct calculation of captial gains tax on payment for redemption of redeemable shares. I have received a payment from a PLC for redemption of redeemable shares, that were previously issued free of charge. This is in place of a dividend. This may have been asked before but I have not been able to find it.

 

[noel 2006]

I put my query to the company concerned -Grafton Group- and they advised me that all of the payment is subject to capital gains tax - i.e., there is a zero acquisition cost.

 

[asdfg]

If the shares were issued Free of Charge, then I think they are correct

 

[jpd]

This means you pay CGT @ 20% on your income/gain instead of income tax of maybe 42% on a dividend - obviously better for those whose income is over the standard rate income tax band.