There was only 1 listed company amongst the whole lot. If I'm honest I don't think there was any logic as to why they didn't value it at its listed price. There were 2 of the larger investments that had some thought put behind them and then the rest was arbitrary - literally $10k against 1 and $20k against another etc.
They didn't discount it for any reason, it got lost amongst everything else that was acquired at the time. I'm thinking that we have a good basis for using its listed value as the base cost, although that would therefore mean something else would need reducing.
Good to have the discussion - thank you everyone - the fact that it isn't blatantly obvious which direction to take makes me feel better!!
It was a US listed share - but the partnership is a UK registered one, so I think this is the right forum!
No connection between seller and purchaser. Seller wanted rid of a collection of investments built up over time and purchaser thought they could make some money out of them - and will do.
What do you mean by 'properly considered'? By whom? The partners did that consideration at the time (albeit 'properly' is up for debate).
I should say that while they bought all of these investments at the same time, they do hold the shares in each one separately.
I agree our tax accountant isn't responsible for this - the partners should have got tax advice at the time they purchased these investments. But they didn't, and now those of us who are trying to do their accounts and tax returns are trying to pick up the pieces. I think there will be more confusion to come!
I'm not asking anyone to value the bundle of shares. I don't think that's how my question reads.
I'm trying to work out whether there is any basis for using the listed price as the base cost for the CGT calculation, or whether the notional $1k that the partners valued this shareholding at is what we will have to go with.
I was once doing an interim role at a small firm when Reception phoned up and said a man from HMRC had just turned up. I was the only finance person on site so had to go and see them. Apparently the inspector was passing by and thought they'd drop in to see if they could pick up a cheque for monies owed. I smiled sweetly and suggested they write to the Finance Director..... (it was all legit, but very odd).
I would just tell your client to ply them with coffee and cake and ask them to put everything in writing.
I knew I should have logged in last night to check replies!
Thank you very much for your input - a second opinion (or third!) is very appreciated. This Director does seem pretty switched on and not the type to double dip his expenses - but the chances of me being able to track back through the years to confirm that is pretty much nil. (a lot of their accounting has been outsourced to various parties over the years.....)
The amount isn't big at all but it does rather stand out on a balance sheet that doesn't have much in it. I'll write it off with a file note so at least there's some audit trail this time as to what has happened.
I'd got 9 months in my head, but forgot that was for payment & not the return. Not too fussed about Co Hse penalties but was a bit worried this stand off was going to lead to some onerous CT related penalties.
I left practice about 18 months after I qualified to move into Industry and have never looked back. I left practice because I was bored & failing to see the value in audit work (in those days it was much harder to move into non audit areas in the big 6 (as they were!) firms). I wanted the challenge of being at the coal face and actually delivering value on a day to day basis rather than just reviewing other people's work - which is how audit had begun to feel to me.
You do need to make sure you are moving for the right reasons. Hoping to reduce the amount of overtime that you do is definitely not one of them! Accountants in industry work very long hours, which have only increased as the recession has hit and department budgets are cut. They can also often end up in very routine jobs and if this isn't to your liking then you need to do your research and make sure you are avoiding many of the more traditional management or financial accounting roles.
On the whole most senior people in industry tend to prefer to take newly qualifieds out of practice & into industry because they don't shy away from doing the low level work that is needed when they take the sideways step into industry (remember that there is a lot you will need to learn). It looks like you've been in practice for about 7 years now, so that might be part of the problem. My best advice is to sign up with one of the large finance agencies and get them to help you write your CV and practice your interview skills.
If I was interviewing today for a newly qualified I would want to see someone who could evidence excellent written skills and could show me good interpersonal skills.
My answers
There was only 1 listed company amongst the whole lot. If I'm honest I don't think there was any logic as to why they didn't value it at its listed price. There were 2 of the larger investments that had some thought put behind them and then the rest was arbitrary - literally $10k against 1 and $20k against another etc.
They didn't discount it for any reason, it got lost amongst everything else that was acquired at the time. I'm thinking that we have a good basis for using its listed value as the base cost, although that would therefore mean something else would need reducing.
Good to have the discussion - thank you everyone - the fact that it isn't blatantly obvious which direction to take makes me feel better!!
It was a US listed share - but the partnership is a UK registered one, so I think this is the right forum!
No connection between seller and purchaser. Seller wanted rid of a collection of investments built up over time and purchaser thought they could make some money out of them - and will do.
What do you mean by 'properly considered'? By whom? The partners did that consideration at the time (albeit 'properly' is up for debate).
I should say that while they bought all of these investments at the same time, they do hold the shares in each one separately.
I agree our tax accountant isn't responsible for this - the partners should have got tax advice at the time they purchased these investments. But they didn't, and now those of us who are trying to do their accounts and tax returns are trying to pick up the pieces. I think there will be more confusion to come!
I'm not asking anyone to value the bundle of shares. I don't think that's how my question reads.
I'm trying to work out whether there is any basis for using the listed price as the base cost for the CGT calculation, or whether the notional $1k that the partners valued this shareholding at is what we will have to go with.
I was once doing an interim role at a small firm when Reception phoned up and said a man from HMRC had just turned up. I was the only finance person on site so had to go and see them. Apparently the inspector was passing by and thought they'd drop in to see if they could pick up a cheque for monies owed. I smiled sweetly and suggested they write to the Finance Director..... (it was all legit, but very odd).
I would just tell your client to ply them with coffee and cake and ask them to put everything in writing.
I knew I should have logged in last night to check replies!
Thank you very much for your input - a second opinion (or third!) is very appreciated. This Director does seem pretty switched on and not the type to double dip his expenses - but the chances of me being able to track back through the years to confirm that is pretty much nil. (a lot of their accounting has been outsourced to various parties over the years.....)
The amount isn't big at all but it does rather stand out on a balance sheet that doesn't have much in it. I'll write it off with a file note so at least there's some audit trail this time as to what has happened.
You read it correctly - my error in writing.
Its around £5k so not big and just cluttering up the balance sheet because its been there for so long.
I'd got 9 months in my head, but forgot that was for payment & not the return. Not too fussed about Co Hse penalties but was a bit worried this stand off was going to lead to some onerous CT related penalties.
Yes - come across this position a number of times. Best course of action is early payment of ax liabilities.
I had to submit a return 1 month after registering
and then they moved me onto quarter dates. No idea why.
More thoughts....
I left practice about 18 months after I qualified to move into Industry and have never looked back. I left practice because I was bored & failing to see the value in audit work (in those days it was much harder to move into non audit areas in the big 6 (as they were!) firms). I wanted the challenge of being at the coal face and actually delivering value on a day to day basis rather than just reviewing other people's work - which is how audit had begun to feel to me.
You do need to make sure you are moving for the right reasons. Hoping to reduce the amount of overtime that you do is definitely not one of them! Accountants in industry work very long hours, which have only increased as the recession has hit and department budgets are cut. They can also often end up in very routine jobs and if this isn't to your liking then you need to do your research and make sure you are avoiding many of the more traditional management or financial accounting roles.
On the whole most senior people in industry tend to prefer to take newly qualifieds out of practice & into industry because they don't shy away from doing the low level work that is needed when they take the sideways step into industry (remember that there is a lot you will need to learn). It looks like you've been in practice for about 7 years now, so that might be part of the problem. My best advice is to sign up with one of the large finance agencies and get them to help you write your CV and practice your interview skills.
If I was interviewing today for a newly qualified I would want to see someone who could evidence excellent written skills and could show me good interpersonal skills.