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UK CGT liability on disposal of shares.

How to calc the base cost of shares acquired when non UK resident, for a disposal when uk res.

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A client acquired some shares in a listed company by virtue of his employment with said overseas company whilst non UK resident.

He then sells this shares when UK resident and faces a UK CGT liability.  

I am interpreting three different treatments of the CGT liability.

 

1. The CGT base cost of the shares is the UK equivalent of the market value when acquired (which would be the treatment of course if he was UK resident when he acquired them)

2. There is no CGT base cost as the shares were acquired when non UK resident.  CGT is paid on the full value on disposal.

3. There is no CGT base cost and CGT is paid on the full value on disposal but with a credit for income tax paid overseas on acquisition, such credit being a maximum of 20% of the gain.

 

(1) seems perfectly logical, (2) seems totally unfair an illogical and (3) seems overly generous.  The legislation seems to be unclear on this issue.  Does anyone have a view?  Thank you.   

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By Tax Dragon
08th Apr 2021 14:21

flixboro wrote:

The legislation seems to be unclear on this issue.  Does anyone have a view?

A view? About whether the legislation is unclear? A view about the base cost that you can adopt in preference to interpreting the legislation? A view about the fairness and logicality of your interpretations?

At the risk of (my) sounding silly (for asking), what legislation are you trying to interpret?

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Stepurhan
By stepurhan
08th Apr 2021 15:03

How did you come up with those three scenarios? Because, if you haven't pulled them out of thin air, explaining your rationale for each being a possibility is likely to be helpful.

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By The Dullard
08th Apr 2021 15:58

1

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By Wanderer
08th Apr 2021 18:08

flixboro wrote:

I am interpreting three different treatments of the CGT liability.

Sorry you don't appear to be interpreting anything, you appear to be just making stuff up.
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