Irish Permanent shares taxation advice

[z108]

Back circa 1994 a relative put my name down as the second owner of shares given out to members of the former Irish Permanent.
And gave them to me as a gift but kept her name down as a joint owner.
Now I feel the time has come to dispose of some or all them for the reason that I dont like to invest mostly in one share despite it appearing to be a good investment , relatively risk free with an excellent dividend and good prospects IMO. And I wish to instead invest in a basket of shares going forward for example an ETF (exchange traded fund), Quinn life or EBS. I feel having all my eggs in one basket is wrong.
So I have 315 Irish Life & P shares now.
I also was stung buying Eircom shares and have been left with 1317 Vodafone shares which havent been doing very well for a long time.
I also have 730 shares in standard life since the Demutualisation but Im willing to take a punt on those for the next year to get the bonus shares.


Im wondering about my tax situation if I start to reduce my holding of Irish Permanent shares and to which stockbroker would be recommended to me. I see myself getting out of single holdings with time , reducing my level of exposure to a select number of shares. Just selling enough each time the tax window is open for me.
The problem is I have no idea about my capital gains allowance or how to perhaps sell the vodafone shares to maxmise the amount of shares I may release from the IL&P in one tax year (before December).
This is compounded by the fact I put my sisters as second names on my original Eircom shares and now they are second names on the Vodafone shares.
When selling can each name on a share cert claim a capital gains allowance thereby enabling a double allowance (including both parties)? There was also a recent return of capital for Vodafone which further confuses the situation for me when trying to picture its worth. I have also been receiving Vodafone scrip dividends for a long time since it was first offfered ( dividends as shares).
How can I get out of this tax quagmire ? whats the best way forward? How much can I sell without being hit by tax?


Any suggestions about what to do ? I have no experience when it comes to figuring such stuff out.


Cheers,


Sign

 

[onekeano]

Re: Irish Permanent Shares Advice (Taxation Advice)

Could be wrong on this one but I think you should have 330 shares at this stage because the gave an extra 30 for holding onto them over a period of time. My own daughter managed to hold onto hers so I suspect it's the same for you if they were the freebies.

Given that they are worth c.€6k now it might be worth doing the B&B (selling a chunk in December and another chunk in Jan (new tax year) thereby getting 2 lots of Capital Gains Allowances (2 x 1270) or (2 x 2540 if you are married).

Roy

 

[CCOVICH]

Re: Irish Permanent Shares Advice (Taxation Advice)

Folks-we are more than happy to allow the discussion of taxation of shares, how to sell shares etc., but any discussion of individual shares and whether to buy or sell is not allowed.

Please respect the or the topic will be locked.

 

[ClubMan]

Re: Irish Permanent Shares Advice (Taxation Advice)

(2 x 2540 if you are married).

Only if the shares are jointly held or are split between the two spouses' individual names. And the individual annual CGT allowance is €1,270 and not €2,540. Annual CGT allowances are not transferrable between spouses. They used to be years ago. Shares can be transferred into joint names some transferred to the other spouse's name at no or minimal cost (no stamp duty, no or nominal transfer fee) by contacting the company's registrar.

 

[onekeano]

Re: Irish Permanent Shares Advice (Taxation Advice)

Only if the shares are jointly held or are split between the two spouses' individual names. And the individual annual CGT allowance is €1,270 and not €2,540. Annual CGT allowances are not transferrable between spouses. They used to be years ago. Shares can be transferred into joint names some transferred to the other spouse's name at no or minimal cost (no stamp duty, no or nominal transfer fee) by contacting the company's registrar.

Clubman - is this actually enforced? I know I have used the 2540 threshold for shares in may name on a few occassion when declaring CGT (on advice of accountant) and Revenue were always ahppy to just accept the cheque.


Apologies CC ......

 

[ClubMan]

Re: Irish Permanent Shares Advice (Taxation Advice)

CGT is a self assessed tax. If you file an incorrect/false return and they don't spot it immediately then you need to correct it as a matter of urgency. I find it odd that an accountant would believe that shares held in one person's name could benefit from more than that individual's annual CGT allowance. If that is the case then I would find another accountant or tax advisor who actually knows a bit about CGT. It used to be the case that the annual individual CGT allowance was transferrable between spouses even if the assets in question were in one of their sole names but individualisation of this allowance has been in force for many years now.

 

[z108]

Re: Irish Permanent Shares Advice (Taxation Advice)

Well I labelled this topic with the words 'taxation' as I had read the rules of the board beforehand but its kind of difficult for me to explain my situation and the way my holdings are structured without naming the shares in particular. I dont want to get into valuations either as theres billions of pages of information concerning such things elsewhere and I ve already read about a half of those billion ;-)
However,if anyone has a point of view they wwant to get off their chest , I welcome reading it in chatmail.

So I guess I can simplify my problem starting below given what I already said:

Regarding the Vodafone shares I ve been stuck with I think I will worry about crystallising the losses on those when I come to sell my standard life shares.

Because the IrishLife&P shares were half gifted to me with my name put second back in 1995 does that mean that my relative and I can both use up our full capital gains allowance on the shares and sell a value worth twice €1,270 without worrying about the taxman?And then deal with the rest of them the next year?
And whats the starting position for valuations? Is my starting value the same as the joint holders position when it comes to calculating tax? My relative obtained them from the former building society upon flotation whereas I was gifted joint ownership later.
So for one example as long as 2*€1,270 money is taken then the tax implications dont have to be worried about ? It's important to remark that I dont hold joint shares with a spouse. I dont feel old enough to get married just yet ;-)

Yes I know theres no substitute for professional advice but Im asking about money in a taxation section of a forum regularly read by smart and experienced people so I feel its ok to ask. if I dont ask I'll never know



Cheers,

Sign*

 

[onekeano]

Re: Irish Permanent Shares Advice (Taxation Advice)

Sign, personally I'd just enjoy the windfall..........

Roy

 

[z108]

Re: Irish Permanent Shares Advice (Taxation Advice)

Sign, personally I'd just enjoy the windfall..........

Roy

Without paying tax?

 

[bazermc]

Re: Irish Permanent Shares Advice (Taxation Advice)

I also was stung buying Eircom shares

Have you already used up your capital losses from the eircom shares?
Losses must be used before the annual exemption

 

[z108]

Hallo bazermc


As I hope I have already clearly explained I still have my vodafone shares (which are in my possession as a result of the Eircon misadventure) therefore the lossses from the Eircom shares are not yet crystallised.
However Im unsure how to calculate this loss.

I've been considering my portfolio is so over weighted in 2 sectors, bancassurance and mobile phones.
Basically now Il&P , Vodafone and Standard Life.

Point 1,

I dont know how to calculate my loss using my vodafone shares (including scrip dividends)

Point2,

How do I calculate a capital gain from shares where half of them were bought in flotation ? (which happpened for Standard life)
If I have 1 share certificate and half of the shares composing it were given free of cost and the other half are bought at a given price.
If I decide to submit the share cert to a stock broker with orders to sell half. which half does the revenue see me as selling ? The half I paid for or the half I got for free. ( wouldnt there would be different consequences regarding capital gains taxation?).


And how do I treat scrip dividends (shares given instead of dividends) for capital gains ? I feel the same problem as above (regarding tax) with the standard life shares. I have gotten scrip dividends from Vodafone since the beginning.

Point 3,


if there are 2 names on a share cert, can both names obtain a capital gains allowance from sale of the shares?

-------------------------------

It seems the simplest thing for me to do is use up my capital gains allowance each tax year. I dont feel any panic to sell them. But I still need to know the answers to my questions as only then can i make a proper decision.

 

[ClubMan]

As I hope I have already clearly explained I still have my vodafone shares (which are in my possession as a result of the Eircon misadventure) therefore the lossses from the Eircom shares are not yet crystallised.

Some of your losses presumably did crystallise when you received payment from Valentia in respect of their takeover of eircom after eircell[2000] was split off and sold to Vodafone?

 

[z108]

This shows how ignorant I am about tax laws.I didnt realise that I had crystalllised some of my loss during the valentia deal . Unfortunately at the time I didnt take advantage of it
So I wonder how much loss Im sitting on, what the original purchase price of each new vodafone share is designated as ????

But there are lots of questions still unanswered. Somehow I will find out the answers

 

[ClubMan]

Unfortunately at the time I didnt take advantage of it

Take advantage of what? Do you mean that you never surrendered your eircom shares and never received your Valentia payment? If so why not?

So I wonder how much loss Im sitting on, what the original purchase price of each new vodafone share is designated as ????

Have you read this thread?

CGT losses on eircom shares

It's a bit complicated but you should be able to figure it out. If not get independent, professional advice. Personally I find direct shareholdings complicated enough in this respect to largely avoid them and stick to low charging unit linked funds instead.

 

[z108]

ok. Yes I did receive the Valentia payment .

I meant that I did not take advantage of any possible offsetting of tax losses versus gains at the time due to ignorance.

Recently I received money from Vodafone when they sold their japanese branch, does this mean I have crystallised a loss here which i should take advantage of?

Thanks for the link to the thread Clubman.

 

[ClubMan]

ok. Yes I did receive the Valentia payment .

I meant that I did not take advantage of any possible offsetting of tax losses versus gains at the time due to ignorance.

What losses and gains are you referring to? Losses other than eircom/Valentia? Gains on the disposal of other assets?

Recently I received money from Vodafone when they sold their japanese branch, does this mean I have crystallised a loss here which i should take advantage of?

Chances are the Vodafone payment was below your annual CGT exemption limit of €1,270 so there's probably nothing to be gained. Unless you mean that you have other capital gains.

To be honest it really sounds like you should get independent, professional advice.

 

[z108]

What losses and gains are you referring to? Losses other than eircom/Valentia? Gains on the disposal of other assets?
Chances are the Vodafone payment was below your annual CGT exemption limit of €1,270 so there's probably nothing to be gained. Unless you mean that you have other capital gains.

To be honest it really sounds like you should get independent, professional advice.

Thanks Clubman ,


Im pretty sure I havent made a cent out of the whole eircon/vodafone experience so how could I have a capital gains?
I was thinking of capital loss.

 

[ClubMan]

I don't know but you said:

I meant that I did not take advantage of any possible offsetting of tax losses versus gains at the time due to ignorance.

above.

 

[z108]

I don't know but you said:

above.

what I am referring to is tax planning, that whenever a loss is crystalllised, the cute thing to do is make sure that at least an equivalent gain is also crystallised within the same tax year . hence making a further saving.

For example when I received cash from the valentia deal, it appears I could have/should have done a B&B with my IL&p shares and reduced some of the tax liabilities therein.
If you consider that although the tax bill is a relatively low 20%, it still adds up and with proper planning ,avoiding the 20% tax legally is a guaranteed way of making a 20% return on the taxable portion. A penny saved is a penny earned .

Am I making any sense ? Im starting to confuse myself now :/



sign*

 

[ClubMan]

what I am referring to is tax planning, that whenever a loss is crystalllised, the cute thing to do is make sure that at least an equivalent gain is also crystallised within the same tax year . hence making a further saving.

No - capital losses can be carried foward indefinitely. You don't need to write them off in the year in which they were incurred.

Am I making any sense ? Im starting to confuse myself now :/

You definitely need independent, professional advice in my opinion.