Key Post: CGT losses on eircom shares - Key Post

IT

Oh no! DC is at it again in [broken link removed]. As far as I can see this time he's using CGT indexation multipliers to modify the calculation of the loss per share. I thought that these multipliers were irrelevant in the eircom scenario (assuming shares held continuously from IPO through Vodafone takeover of eircell to Valentia buy-out) since they can't be used to enhance/increase a capital loss? Is this a mistake on DC's part?
 
IT correction

This mistake (application of CGT indexation multipliers to increase loss) is corrected in today's Times. Unfortunately the Q&A section of Business 2 doesn't seem to be online.
 
CGT loss

Can you only put down a CGT loss if you sell the Vodafone shares...or is it on their current price?
 
Re: IT correction

Normally a CGT loss can only be offset against other capital gains in order to reduce CGT liabilities when the loss has actually been realised - i.e. when the loss making asset has actually been disposed of - and a subsequent capital gain has been realised against which you offset the loss. If you still hold shares at a "paper loss" then the loss cannot be written off. There may be some exceptions (e.g. when an asset is effectively valueless and/or can no longer be traded the "paper loss" may be written off I believe - the Revenue have some rules for these scenarios) but I don't believe that these apply in the case of Vodafone shares.
 
eircom loss

The easy steps are great and I realise these posts happened in 2001, but could we amend Step 5 & 6 to take into account that:
- the Valentia cheque may have been in £ or € (depending on whether they lost your forms in the post)
- the amount paid for eircom in £ but
- your tax return will be in €?

With all the calculations to do, it's easy to forget!
 
eircom loss

would anyone please have the date the cheques were issued as I have been trying to figure out what I was paid. thanks
 
Re: IT correction

I presume you mean the Valentia takeover payment for eircom? If so it seems to have been November 16th 2001: [broken link removed]
 
eircom loss

ah thanks, could not place at all when I got the disappointing cheque!
 
>>CGT losses on eircom shares - Key Post

I've tried to make head & tail of this, but have instead been mightily confused by all of the corrections and corrections of corrections.

Please could the esteemed moderator give us an unequivocal gospel on how to calculate CGT loss for Eircom shares and the cost basis for Vodafone shares? (Please also include the indexation)
 
Eircom share

Can I assume that if I multiply my/wives shares by .29c and work out the loss I can offset this against the First Active buy out of a few weeks ago. Or do I have to wait for my wife to make a hit somewhere in order to 'use up her losses' We are taxed collectively.
also my employer has indicated to me that vol. ( sort of) early retirement is on the cards soon. my cut off point at 37,000 will then be way in excess of my income unless I find further employment, I assume that I can transfer any of the surplus unused cut off to her. I am aware that the 2nd person (not being sexist) has a cut off point of their own of €19,000 that cannot be transferred in the other direction but can I reverse this and be the 2nd person if necessary, or just transfer say whatever is required to take her back to 20% on all her earnings.
 
CGT losses on eircom shares - Key Post

Seems the moderator's overstretched?

Can anybody help him out to clarify this for once and all?
 
Re: Eircom share

Your wife can only offset her eircom or other previously incurrec losses against a gain made on assets held in her name (solely or jointly). If the FA shares were in your sole name then you cannot use her CGT allowance or accumulated losses when calculating your CGT liability. Otherwise capital losses and CGT allowances are not transferrable and CGT applies on an individual basis. CGT is completely separate to income tax. These topics might be (possibly of academic) interest to you:
 
what form to fill out

Right recieved instructions from government that they want money for the first active cash windfall.

I have a large eircom deficit of 1700 euros which i would like to write off against this how do i fill this out / into what form ?

What form do i fill out ?
 
eircom etc

There are some complications to the FA CGT issue that you may need to be aware of - e.g. the fact that you may need to offset some of your eircom losses against the FA capital repayment in 2003 before you use 2003's annual CGT exemption of €1270 or carry the eircom losses forward to offset against the takeover payment. See this topic and the others that it links to:



To make a return you can fill in a CG1 form and/or include your calculations (e.g. spreadsheet etc.) and simply return them with a cheque and the payslip attached to the Revenue letter.
 
CGT Losses on Eircom Shares

I would appreciate a speedy answer on this one. I owe CGT for 2004. I am thinking of selling my Vodaphone shares to offset some of this (before the end of year, hence need for reply!!) My questions are:

How do I calculate the loss on these shares?
From reading post above, I gather that the purchase price is 4.51 euro per share (?)
Do I apply an indexation figure to this? (if so what is it?)
And then take away the price I sell at?
This would be my loss?

I have not before had any CGT liability and so would not have claimed for loss on the portion sold to Valentia? Can I still claim this portion of the loss? I have declared dividends on revenue forms but don't recall declaring this sale - would I have had to have in order to claim this?

All help appreciated.

Monquest
 
Re: eircom etc

I would appreciate a speedy answer on this one. I owe CGT for 2004.

Are you sure that you're not [broken link removed] on filing this liability?


How do I calculate the loss on these shares?
From reading post above, I gather that the purchase price is 4.51 euro per share (?)

No - the allowed acquisition cost is by my reckoning.

Do I apply an indexation figure to this? (if so what is it?)

See the [broken link removed] for a list of CGT indexation multipliers. Choose the one that matches your date of acquisition and disposal. Note that idexation stops at December 31st 2003.

And then take away the price I sell at?

No - you subtract the indexed acquisition cost plus any plus any plus your annual CGT allowance of €1,270 (if not already used up) from the sale price to get the amount on which CGT at 20% is charged. If there is a loss then this can be offset against subsequent gains.

I have not before had any CGT liability and so would not have claimed for loss on the portion sold to Valentia? Can I still claim this portion of the loss?

If you have undeclared losses then Revenue will most likely allow you to use them. Just include detailed calculations explaining how you arrived at the loss and how you offset against a subsequent gain.

I have declared dividends on revenue forms but don't recall declaring this sale - would I have had to have in order to claim this?

Which sale?

If in doubt get expert advice particularly if the sums involved are large in the context of your overall savings.
 
Eircom etc

Are you sure that you're not already overdue on filing this liability?
Thanks for this, I sold the assets in question in October so have until 31 Jan to return.

No - the allowed acquisition cost is €2.067 by my reckoning.
I am getting a bit confused with the different numbers. Was this 2.067 not the value as set the day after Vodaphone takeover, ie. Eircom = 1.11, Vodaphone = 1.45406 total = 2.56406? Should I not be applying these percentages to the actual cost I paid (3.90) not the value in 2001? See CM’s post of 23/11/01 above which gives the nominal cost of Vodaphone share as 4.66?
If the nominal value is 4.66 it will be worth my while selling. If 2.067, I have no loss/small gain depending on indexation so it is not worth my while selling.

Do I apply an indexation figure to this? (if so what is it?)
I notice that CM’s post of 30/11/01 says indexation can’t be used for the takeover. Is that still the case?

you subtract the indexed acquisition cost plus any allowable costs plus any previously incurred capital losses plus your annual CGT allowance of €1,270 (if not already used up) from the sale price to get the amount on which CGT at 20% is charged. If there is a loss then this can be offset against subsequent gains.
Thanks for this detailed explanation.

I have declared dividends on revenue forms but don't recall declaring this sale - would I have had to have in order to claim this?

Which sale?
I did not fill in on my Tax Return that I sold Eircom shares to Valentia – purely never struck me as a sale of shares when filling in the form.

Thank you for your speedy response and all the effort you put in to making AAM such a good site.
 
Re: Eircom etc

I am getting a bit confused with the different numbers. Was this 2.067 not the value as set the day after Vodaphone takeover, ie. Eircom = 1.11, Vodaphone = 1.45406 total = 2.56406? Should I not be applying these percentages to the actual cost I paid (3.90) not the value in 2001? See CM’s post of 23/11/01 above which gives the nominal cost of Vodaphone share as 4.66?
If the nominal value is 4.66 it will be worth my while selling. If 2.067, I have no loss/small gain depending on indexation so it is not worth my while selling.

Sorry - I was overlooking the fact that Vodafone takeover shares were not issued on a one for one basis for eircell2000 shares so the previous posts on the original eircom acquisition costs attributable to Vodafone shares are more accurate than my previous one. Again apologies for that... :eek: I've been through these figures several times myself but still (obviously) get confused about them since the whole eircom/eircell2000/Vodafone situation was all a bit complicated, particularly for the many novice first time direct share investors who participated. Best to go through the previous posts above in detail (particularly Brendan's point by point summary post) and double check that you understand how the figures are crunched and what your ultimate loss is.

I did not fill in on my Tax Return that I sold Eircom shares to Valentia – purely never struck me as a sale of shares when filling in the form.

Neither did I because I wasn't (and still amn't) sure that a return to record a loss was necessary. I have since written the loss off against subsequent capital gains and Revenue have not complained so far. As I said before it's a good idea to err on the site of caution and provide Revenue with detailed calculations of how you arrive at your various figures.

I notice that CM’s post of 30/11/01 says indexation can’t be used for the takeover. Is that still the case?

Indexation can be used in a takeover situation but it can't be used to enhance (increase) a loss so if this is a loss making situation (as I presume it is) then indexation is irrelevant after all. Apologies for any confusion caused.
 
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