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Where Taxpayers and Advisers Meet

CGT on 'delisted' shares in ISA

alpal
Posts: 3
Joined: Mon Dec 31, 2018 10:48 am

CGT on 'delisted' shares in ISA

Postby alpal » Mon Dec 31, 2018 11:02 am

I held shares in my ISA. Value [say] £4000.
The company decides to liquidate itself [its business purpose on longer valid] but it is not insolvent and says it will return the NAV to shareholders in cash. While doing this the company loses its listing on the LSE.
The stockbroker says I may not continue to hold an unlisted share in my ISA; so transfers the shares to my ordinary share trading account.

BUT [and here's the rub] they transfer the shares out of the ISA at NIL value; so I lose that value out of my ISA.
BUT [much worse] the stockbroker says that when the liquidation funds are received, they are liable for Capital gains Tax in my share trading account.

Logic says this cannot be right but I will appreciate any info I can give to my broker to correct this.

AGoodman
Posts: 609
Joined: Fri May 16, 2014 3:47 pm

Re: CGT on 'delisted' shares in ISA

Postby AGoodman » Thu Jan 03, 2019 2:28 pm

I suspect it is correct and logical (if not very fair). It all stems from the requirement that the ISA cannot hold unlisted shares. The shares have to be moved out and the CGT disposal only takes place when the liquidators later make distributions. The transfer out of the ISA cannot rebase the shares because it is a transfer from you to you - the ISA wrapper is not a "thing" in itself.

pawncob
Posts: 4192
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: CGT on 'delisted' shares in ISA

Postby pawncob » Thu Jan 03, 2019 4:33 pm

The base cost for CGT is the amount that they cost when you bought them. Being in an ISA wrapper doesn't change the facts.
With a pinch of salt take what I say, but don't exceed your RDA

alpal
Posts: 3
Joined: Mon Dec 31, 2018 10:48 am

Re: CGT on 'delisted' shares in ISA

Postby alpal » Fri Jan 04, 2019 3:19 pm

Thanks for advice but opinions seem to conflict.
My logic says they should be transferred out at last traded price but I cannot see how 'nil' value is correct.
Any suggestion on how to clarify this with HMRC?

pawncob
Posts: 4192
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: CGT on 'delisted' shares in ISA

Postby pawncob » Fri Jan 04, 2019 4:17 pm

Where plan investments are withdrawn in specie the investor is deemed to have made a disposal and acquisition at market value, thus exempting any gain or loss arising prior to the withdrawal. Your plan manager should be aware of this.
With a pinch of salt take what I say, but don't exceed your RDA

alpal
Posts: 3
Joined: Mon Dec 31, 2018 10:48 am

Re: CGT on 'delisted' shares in ISA

Postby alpal » Tue Jan 08, 2019 6:57 am

Pawncob, Please clarify ‘investment plan’ and ‘plan manager’. Shares were in a ‘self-administered’ ISA.
I will be pleased to confirm the shares should have been transferred out at market value. Where can I find confirmation of this?

pawncob
Posts: 4192
Joined: Wed Aug 06, 2008 4:06 pm
Location: West Sussex

Re: CGT on 'delisted' shares in ISA

Postby pawncob » Tue Jan 08, 2019 11:39 am

These were the terms used in the original legislation, relating to PEPs and carried over to ISAs.

https://www.legislation.gov.uk/uksi/1998/1870/regulation/34/made
With a pinch of salt take what I say, but don't exceed your RDA


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