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Capital gains tax - Eform

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05 Sep 12 #354000 by esox11
Topic started by esox11
Nearly there in completing mine but this has stumped me this afternoon... I have no idea.

I have some shares in the company i work for which have gained in price since purchased just over a year ago.

I also have shares in a company scheme which i purchase monthly from my wages.

I have a 50% share of a property left to me in a will.

I have a 50% share in the family home which is worth far more than the mortgage.

Lost as to where do i start in regard to the Eform... Totally lost so any help appreciated.

E Sox

I have sh

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05 Sep 12 #354009 by rugby333
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Go and speak to an accountant. Apart from anything else, the other side will require independent verification of any tax liability you purport to have in your form E.

At a guess:

1. The shares in the company probably attract tax if you were to sell them. However I would want to understand how they would be valued? Are they subject to any time considerations before you can sell them? Will you reach your capital gains tax threshold? etc

2. The property from the will: can you sell it? What are the costs attributed to that sale? Does this breach inheritance tax limits? What is the value?

3. The family home: what''s its value? how much would it cost to sell? Is it (for tax purposes) your principle private residence? Whose name is the mortgage in? Are there penalty clauses for early redemption of the mortgage or do you intend to take the mortgage on to another property? Can you do this without penalty?

As I say: collate the information and spend a couple of hours with an accountant.

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05 Sep 12 #354012 by esox11
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1. The majority of the shares are held in a share account. Free to sell. Would not exceed the £10600 level before CGT kicks in. just! I assume the cap gain tax is just liable on any profit made.

A small number are locked in and a further small number are liable to tax and NI.

2. Inheritance was years ago and Inheritance tax paid. I am living there. My share of the value is 50% - £240000

3. FMH - she lives there. Joint names. £330000. £85000 mortgage, no early pay off fee. Did plan to pay it off next October when our endowments mature.

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05 Sep 12 #354018 by rugby333
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1. Ok re shares.

2. Inherited house:

ok with value if you are. 3% cost of sale needs to be deducted on form E.

Just to be sure: have you ever rented it out during your ownership? Has it gone up in value since you took ownership?

The issue here is: if the value of the property has gone up since you owned it and it has not been your principle private residence throughout that time, there could possibly be a tax liability on sale which needs to be reflected in your form E.

3. marital home:

Is there any way the marital home could have a tax liability associated with its sale? i.e. was it ever rented out? Was it always the principal private residence of the family?

Is the marital home owned in joint names?

Is the mortgage on the marital home in joint names?

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05 Sep 12 #354027 by esox11
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1. Ta
2. Never rented. Another family memberived there free of charge. Then a year empty being renoveted.

Valuations at time of inheritance and. Now are virtually same. varies according to agent. Biggest increase is 15000 one say same value.

3. Never rented - was always out family home.
Mortgage and ownership in joint names.

Really appreciate the help. Ta

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05 Sep 12 #354033 by rugby333
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Ok. Your form E on these assets is relatively straight forward then:

1. On shares:Put in share value. Put in share tax liability.

2. On inherited home: Put in value at £240,000. Put in cost of sale at 3% (£7,200). Total asset value £232,800.

3. On matrimonial home: Put in your value in the property at 50% of£330,000 = £165,000. Your cost of sale is 50% of 3% of £330,000 = £4,950. You cost of mortgage redemption is 50% of £85,000 =£42,500. Total asset value (to you in your form E) = £165,000 minus £4,950 minus £42,500 = just under £120,000, you better do the numbers!

Endowments need a current surrender value, which the provider can give you relatively quickly.

Pensions need what is called a CETV which your pension provider can send you (may take a few weeks)

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05 Sep 12 #354037 by esox11
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Endowments are not tied to the mortgage. Not sure if that makes any difference?

Got the CETV and surrender values.

Thanks again

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