PreConversion

The CCH Central client hosts the CCH CGT and Dividend Scheduling application. The conversion looks at the client reference in CCH SecTAX and then looks for a match to the client code in CCH Central. If a match is found then the data is appended to the CCH Central client. If no match is found then the conversion can create a new client in CCH Central (see Configuration).

The conversion routine produces a security map. This checks that the security codes in use in CCH SecTAX are valid, up to date and recognised by the CCH CGT and Dividend Scheduling securities database. Securities are classed as

• Valid,
• Valid but Defunct
• Not Recognised

Any cases that contain codes classed as either Valid but Defunct or Not Recognised need to have the codes replaced in SecTAX by valid codes before they can be converted. The message Valid but Defunct usually indicates that autopost has not been run on all clients where there is a complex capital event on a security. SEDOL and ISIN codes used in SecTAX are replaced by CCH codes unless you have a London Stock Exchange licence to use SEDOL codes.

To ensure that the correct data is converted into the correct record there are a number of housekeeping tasks that need to be completed.

Housekeeping 

• Run a Securities in use report in CCH SecTAX, choosing the invalid security codes option. These need to be corrected in CCH SecTAX before conversion or during the mapping process of the conversion. The conversion program allows you to browse to and select a security within CCH CGT and Dividend Scheduling.
• If you have corporate clients check the RPI figures are up to date in CCH SecTAX. The RPI screen is found at Activities 4 Common/shared data 4 RPI Tables. It displays the current figures. To see previous years click the yellow Previous Year button or F7. You can import RPI figures into CCH SecTAX by importing S6SECCOM.IMP.
• If you have clients for whom you no longer act, delete them or archive them to another database and then delete them. This ensures that only securities in use by live clients are reported when a Securities in use report is run.
• Print a client list from CCH SecTAX and from CCH Central and compare lists to ensure that where a client exists in CCH Central and in SecTAX the client code is consistent. If necessary change the client reference in CCH SecTAX.
• Ensure that client types have been set up correctly in CCH Central. To do this Create a report in CCH Central under Smart reports > Client > Client List including the following fields: Print the client list in code order:

  • For all limited companies the Contact Type must be set to Limited

  • For all Trusts and Estates the Contact Type must be set to Trust

  • For all individuals the Contact Type must be set to Other Person

Joint Accounts 

If there are any joint records in CCH SecTAX there are a number of ways that these can be dealt with in CCH Central. It is recommended that you consider the following scenarios and produce a practice guide on how to deal with these.

In a simple case where there is just one portfolio for a husband and a wife the portfolio can be set up on one spouse e.g. the husband, and on the tax link tab each client can link to the husband’s CCH CGT and Dividend Scheduling record and the appropriate percentage applied.

If the husband also has a personal portfolio and there are no investments common to both portfolios, the joint portfolio can still be hosted in his record.

If there are investments common to both portfolios, the personal portfolio and a percentage of the joint portfolio should be consolidated to ensure the correct capital gains tax rules are applied. The application is not able to deal with this. In this scenario we recommend that a portfolio is set up on both clients and all transactions halved.

It is also possible to set up a joint record in CCH Central to host the portfolio but this may not be permitted by your CCH Central administrator especially where CCH Practice Management is used.

Multiple Portfolios 

CCH CGT and Dividend Scheduling allow multiple portfolios with a single client.

Note on what to convert

The conversion routine takes the closing balance at a specific date and uses that data to create a set of opening balances for the next year. If the tax year to 5 April 2017 has been processed in CCH SecTAX then select April 5th 2017 and the conversion extracts a set of closing balances as at that date and creates a set of opening balances in the period April 6th 2017 to April 5th 2018. The earliest date that can be selected for conversion is April 6th 2008.

Configuration

Conversion

1. Take a backup of the live SecTAX database.

2. Back up CCH Central database.

3. Take a copy of the deploy folder.

To start the conversion routine go to Maintenance > CGT and Dividend Scheduling > Convert Legacy Data > SecTAX. If you get an error message referring to the Gains data base connection string this can be ignored.

The conversion routine can be run on an individual client or a batch of clients.

1. Select Closing balance date.
2. For an individual client select type from drop down list. The search is on CCH SecTAX data and can be on Client Name or Code.
3. Select Search for full client list.
4. If the client already exists in CCH Central the Central Client Exists column is ticked.
5. If that client already has a portfolio set up in CCH Central the CGT and DS Data in Central column is ticked.
6. Tick clients to be converted.
7. Select Security Map and click on column header Status to sort.
   

8. The conversion attempts to map the security codes in use in CCH SecTAX to the correct codes in CGT&DS. Using this screen is described in the next section.

9. For security codes that exist in CCH SecTAX but not in CCH CGT and Dividend Scheduling you can find a replacement code. Double click CGT and DS Security Code box to bring up Security Lookup tool. Click OK to update the entry on the grid. This does not update the data for mapping but allows you to tidy up the data which can then be exported to excel and utilised for the housekeeping in SecTAX.

   Note: The manual mapping changes made in this way are not stored for reuse and are lost if Close is selected. It is better to make all changes in SecTAX as described below.

10. Go back to CCH SecTAX and edit the security codes in the CCH SecTAX Securities List to codes that exist in CGT and DS. To facilitate this approach use the Excel spreadsheet produced using the Export button above.

11. When all the securities in the batch are classed as Valid click the Create Map button.

Using the Security Map

The conversion attempts to map the security codes in use in CCH SecTAX to the correct codes in CGT&DS. CCH SecTAX can use SEDOL or ISIN codes. CGT&DS uses SEDOL or CCH codes.

The Status column can be:

• Valid. Theconversion has found a valid CGT&DS security code. This is shown in the CGT and DS Code column.
• Valid but defunct. The code in CCH SecTAX is a valid SEDOL or ISIN code (i.e. its check digit is correct) but no matching code can be found on the CGT&DS masterfile. There are two possible reasons for this:​

1. The CCH SecTAX security code is valid but missing from the CGT&DS masterfile. In this case the description 'Valid but defunct' is inaccurate; 'Valid but missing' would be more appropriate. To resolve this, request the security via the CCH CGT Security Codes web site
   (https://software-download.wolterskluwer.co.uk/downloads/SecuritySearch.aspx)
    
2. The CCH SecTAX security code is invalid perhaps because it is defunct. In this case the problem could affect either all clients or just the one client being converted:
   • If all clients are affected then edit the security code in CCH SecTAX (in Edit Security).
   • If only the current client is affected it is probably because a Wizard needs to be run to convert the security to a new security code. This may require setting up the event in the Security History of the old security (in Edit Security > History). Then run the Wizard using the Autopost on any clients affected.

• Not recognised. The code in CCH SecTAX is not a valid SEDOL, CCH or ISIN code.

  • This could be because it is an unlisted security which is not present in the masterfile. In this case, add it using the CCH CGT Security Codes web site, using the Add Unlisted Company tab. When an Unlisted Security is added via the CCH website, the website allocates a SEDOL code (actually a “dummy SEDOL code” starting with a 9”) and a CCH code (starting with a Z). Either of these codes can be entered as the security code in CCH SecTAX.

  • It could be that the user does not subscribe to a data feed and has just made up their own codes. If this is the case, find the correct security code using the CCH CGT Security Codes website and then edit the security code in SecTAX to match.

    Tip: Run a list of Securities in Use in CCH SecTAX to help identify all invalid security codes across all clients.
    
    Tip: When looking up securities to find the correct code to use in CCH SecTAX for the conversion, you can search in either CGT&DS or the CCH website. If the search is made in CGT&DS and you are not licensed for SEDOL codes, then you will see the security’s CCH code. This code can be entered into CCH SecTAX (in Edit Security) and the conversion will recognise it when it is next run.

Securities with an Alternative Treatment

One of the trickiest cases is where a security could be processed in alternative ways in CGT&DS. There are several cases where this happens:

• A gilt that is paid net or gross.
• A security that can pay dividends in alternative currencies, with foreign tax in some cases.
• There is some uncertainty about whether a security is a reporting or non-reporting fund.

In these cases the most common treatment is set up on the main security code, but there may be alternative securities set up to handle scenarios judged less common. These alternative securities are identified by a 'dummy SEDOL code' (starting with a 9”) and a matching CCH code (starting with a Z).

For example, Experian pays dividends in both GBP and, alternatively, with foreign tax deducted. A user might have a holding of Experian in CCH SecTAX with foreign tax deducted and find that after conversion, UK tax is being deducted. If this happens, proceed as follows:

• Search for the security by name on the CCH website. Two possible securities will be shown, possibly with identical security descriptions. The conversion will have converted the data to the main security code. Edit the Balance B/Fwd entry in CGT&DS to use the alternative code (starting with a 9 or a Z).
• If there are other holdings in CCH SecTAX that have yet to be converted then edit the security code in CCH SecTAX in Edit Security to the “9 dummy SEDOL code”. This will avoid the problem on future client conversions.

Pre Validation

The conversion program contains a Pre-Validate facility that processes the conversion without creating any data in the CCH Central database. All securities must be mapped before the facility can be run.

The pre-validation report highlights any issues encountered when the full conversion is to be processed. The log looks the same as in the live conversion with the exception that each line is prefixed with “Pre Validation”. Any issues highlighted by the pre-validation should be corrected in CCH SecTAX before converting the client.

If no issues are highlighted by the pre-validation the log reports “Pre Validation Converted, Client Code, Client Name, Fund Name”.

Transactions may be excluded from the conversion for a number of reasons such as a missing 31 March 1982 value, a missing GBP value or a holding error.

Pre-validation is not a mandatory step in the conversion process but it is useful in highlighting the issues that may arise during conversion. A security map must be created before the pre- validation routine can be processed.

Conversion

Once a security map has been created you can proceed to convert the selected clients. Click the Convert button to start the conversion. Any transactions that are not converted are reported in the conversion log which will is displayed on screen following the conversion and can also be found as a text file:

SecTAXConversionReport.log - in your CCH CGT and Dividend Scheduling Temp folder,

…\ProSystemData\CGT and Dividend Scheduling\Temp.

Any issues highlighted by the conversion should be corrected in CCH SecTAX before converting the client. Please note it is not possible to convert a batch of clients containing security codes that are valid but defunct and/or not recognised. As such it is probably best to initially convert small batches of clients.

Post Conversion