Member Info for MrMath

Chargeable gains

Shareholders who are resident in the UK for UK tax purposes should not be treated, by
virtue of the receipt of Haleon Shares pursuant to the Demerger, as making a disposal or
part disposal of their GSK Shares for the purposes of the taxation of chargeable gains.
Instead, the Haleon Shares issued to each such Shareholder pursuant to the Demerger
should be treated as the same asset, and as having been acquired at the same time, as
the GSK Shares already held by them. On this basis, such Shareholders should not incur
any liability to tax on chargeable gains as a result of the Demerger. The aggregate base
cost of the GSK Shares and Haleon Shares immediately after the Demerger should be
the same as the base cost of the GSK Shares immediately before the Demerger. Such
base cost should be apportioned between the GSK Shares and the Haleon Shares held
by each Shareholder by reference to their respective market values on the first day on
which the market values or prices are quoted or published for such shares.

So apportion your original base cost as follows:

Original_base_cost x G/(G+H) for the now GSK portion and
Original_base_cost x H/(G+H) for the now Haleon portion,

where G and H are the respective closing share prices on Monday.

"but plan to wait a little longer now."

I've lost out numerous times by waiting a little longer.

"people who sold at 18.08 were better off"

I sold out at close to that but then went and put a chunk of the cash into RIO, which is tanking today. So not much better off at all!

Thanks for the interesting blog. I sold out completely a few days ago on the recent highs and will, likely, be buying back in after the split. However, I got tempted by the recent lows in LGEN and RIO and so will be buying back in with about half my previous investment.

Nothing declared yet but they usually go ex-divi around 8th/9th/10th August (payment mid September) so they'll likely declare before then. Guessing it will be around the £1.25 mark.

"analysis on Rio. 9 - strong buy"

This is great income share, just buy on the dips (bought another 1300 shares on yesterday's dip) and hold forever and enjoy the dividends. Definitely a strong buy.

"all I care about is divi payment year as larger than my losses"

Same here, my capital is down but I'm still well in profit when one includes the dividend payments over the years. And that's why I bought this share and why I bought more yesterday. Don't fret about the short term. That said, I do think LGEN will be back over £3 by the end of the year.

I have cracked and sold too. The capital gain is pretty decent but 'fortunately' the losses I've been carrying from the Sirius Minerals debacle can now be put to good use! Will probably buy back in after the split.

Bought RIO less than 3 years ago and am still over 40% up when dividends are included. It's difficult to see this ever going negative for me from here on, but if it does dip to close to my original purchase prices then I will certainly be topping up.

"But instead in school, lets teach kids algebra and trigonometry.... that will come in handy eh?"

Worked for me!

"Have set buying limit at 210p"

We'll need another pandemic or time machine, to go back almost 10 years, to ever see those lows again. But if we do, I'll be selling my eyeballs to top up!

"My average on LGEN is £2.66 so I'm very much underwater"

My average, at 262p, isn't much better than yours and yet I am still just over 4% up when the dividends are included.
It always been a massive signal for me, as an income chaser, to buy more when a share is in this situation.

Bought another £10k's worth at 242p.

"What are the rest of you doing with your dividends?"

That's a good question to which I don't know the answer yet. Maybe buy some more ULVR since LGEN is already my largest holding whereas ULVR currently only ranks fifth and has more short term growth potential. Would prefer to spend it going on holiday but they need to get the travel situation sorted out first.

@zac
Similar story to me, capital not much changed but loads of dividends received over the years.

"Even up 7%, this is still dirt cheap."

Totally agree, which is why I made a couple of recent top-ups before today's rise. And it's also why I'm not selling them for a quick profit.

Seems like all my recent topping up has worked!

The formula is correct (and so is the bracketing - it's just a question of reading it in the normal way). If you get a negative answer then you've made a capital loss - which is my case!

It's going down on my tax form. With regards to tax I like to be very proper, taking a 'not a penny more, not a penny less' approach.

"I will check MrMath's formula for calculating CGT and will post here if it is not correct."

It works up to any fractional entitlement i.e. ignores any fractions of shares. I haven't looked into what happened to any fractional entitlement as this was not my case. Sometimes fractional shares are even given away to charity as in practice they will make very little difference to the sums!

"there is no capital gain from the returned capital - any potential gains can be worked out when selling shares on the re based cost"
There is. It probably won't be much or even anything for the majority. Here's a worked example:

https://www.gpe.co.uk/media/2793/return-of-capital-worked-tax-example.pdf

Also, some people may have a capital loss due to the recent consolidation and it's worth putting that on their tax form for future use.