SVM107130 - Capital Gains Procedures:Share Identification -1982 Holding

If a customer transfer shares out of a March 1982 shareholding to a spouse or civil partner they may elect to have the value per share of all the shares held and treated as held on 31 March 1982 computed by reference to the size of the largest shareholding actually held on 31 March 1982 out of which any of the shares sold were transferred

Example

At 31 March 1982 a person owns 80 out of 100 issued shares in an unquoted company. In 2006 they transfer 20 shares to their spouse or civil partner who had not previously owned any shares in the company. The spouse or civil partner sells these 20 shares.

If the spouse or civil partner makes a claim to take advantage of this the instructing office should ask SAV for a value per share at 31 March 1982 based on a holding of 80 shares. If SAV agrees a value per share of £2,000 based on an 80 per cent shareholding, the 31 March 1982 value of the spouse’s or civil partner’s shareholding would be 20 x £2,000 = £40,000.

This works in exactly the same way for shares transferred from a member of the same group of companies.

Example

At 31 March 1982 A Ltd owns 80 out of 100 shares in X Ltd. Its two subsidiaries, B Ltd and C Ltd, own none. A Ltd transfers 40 shares each to B Ltd and C Ltd. B Ltd and C Ltd immediately sell the X Ltd shares.

On a statutory basis the value per share would be based on a 40 per cent shareholding for B Ltd and C Ltd. If B Ltd and C Ltd make a claim the instructing office should ask SAV for a value per share based on a holding of 80 shares.

If the customer or agents claims this benefit in a letter to SAV, or if you consider that they would benefit from a higher value at 31 March 1982 by making a claim, you should take the matter up with the instructing office who will consider whether the time limit for claiming the concession has expired.

Additional Guidance: SVM150000