Member Info for JTec

No problem Oily, I do appreciate what you are saying.

Anyway, in case anyone is still interested in the tax implications, I have just spoken on the phone to HMRC & they told me there is NO chargeable gain on the demerger/capital reduction as there is no change to the overall investment amount , just simply a re-allocation of funds, & the only chargeable gain (or loss) or tax implication will be as & when you sell either of the shares as per normal based on the current stock costs allocated to those shares.

Hope that has cleared it up for anyone who doesn't hold KRS (& CAI) in an ISA or SIPP.

All the Best.

Oily, sorry, but I didn't have a choice at the time. When I bought my KRS shares back in Dec '17 I had already maxed out my ISA & since then I haven't been in profit until the Calidus Share Distribution RNS came out, but I haven't BED&ISA'd them since the RNS because I wasn't sure whether Hargreaves Lansdown would allow me to hold CAI shares in my ISA, as they would be ASX listed, so I just left the KRS shares in my Fund & Share account.

I suppose in HMRC's view it would depend a lot on the Keras & Calidus share prices going forward. If you are currently in profit and/or the share prices increase, then they would argue that the demerger (or capital reduction) has enabled you to make more profits or release you profits sooner, so in that sense the return of capital allocated to the Calidus shares should be treated as a chargeable gain (otherwise it's a negative for HMRC). On the other hand, if you were currently making a loss or the share prices drop away, then they probably wouldn't be quite so bothered about the capital reduction, as it could take some time to make a profit or if you took the losses now it means your losses available to offset your chargeable gains could be smaller than they would have been before the merger, & so if your chargeable gains are above the threshold allowance (currently £12,000) your capital gains tax for the year would be higher (a positive for HMRC).

Please feel free to correct me if I am talking rubbish.

Thanks for your reply Mark, fully understand what you are saying & that's what I was hoping would be the case, but as Tom has pointed out, it does say in the RNS that it should be treated as a part disposal, so I suppose it's a bit like a return of capital (where no shares are disposed of), hence a chargeable gain. Unless we are reading more into it than we should, & perhaps it is just the wording that they have used in the RNS that has made it look more confusing.

Cheers, thanks for your responses. I thought that would be the case, but I just wasn't sure whether we had to treat it as a return of capital, & basically a sale & re-purchase. I did also think about submitting a BED&ISA prior to the demerger which would have removed any uncertainty.

Can anyone please clarify something for me regarding Capital Gains Tax as mentioned in the RNS on the 21st November.

The fact that part of the original costs in Keras shares has been returned to us & then allocated to the new Calidus shares, do we have to treat this a disposal in Keras shares & thus a partial Chargeable Gain for the current tax year, or do we simply treat it as a Chargeable Gain (or Loss) in the normal way as & when we sell the Keras and/or Calidus shares ?

Can anyone please clarify something for me regarding the Tesco Compensation Scheme. I received my payment last week via my broker, which was made up of a compensation payment for the number of shares purchased during the compensation period, plus some interest for the period the compensation was owed. The compensation payment itself was NOT taxed, but the interest portion had tax deducted at 20%. Come the end of the tax year, am I right in thinking the compensation portion of the payment has to been treated as a Capital Gain, and hence count towards the annual Capital Gains allowance, or are compensation payments exempt from tax (I'm presuming not). I am also presuming the interest portion of the payment does NOT count towards Capital Gains, and has been taxed anyway, so it's a bit like interest on savings accounts, before they recently changed the rules to pay interest gross. I contacted my broker (Hargreaves Lansdown) & KPMG (Scheme Administrators), but neither of them could answer this, so unless anyone out there can clarify or confirm this for me, I suppose my next stop will be HMRC. Thanking you in advance for any replies posted. Cheers.

Hi JackBean, Many thanks for taking the time to post a reply, & for your comments, it's much appreciated. Have a good week...

I assume this is virtually a done deal, so being that my average is currently 28p & the current buying price is 19.394p, is it safe to pile more money in, in order to reduce my average & wipe out my losses ? Any comments are much appreciated.