Data Entry - Historical Data

Enter the following transaction details into the Add Security Transactions window:

To locate the ISIN number press F2, the following window appears:

Click Find the following window appears:

Enter the name of the security in the Search by section and leave the search criteria by Name:

Click Find. The list of securities beginning with Abbey National is displayed. Scroll through the list to locate the correct security and highlight this on the list:

Click Select the following window appears:

The movement code is required to be entered. If you know the movement code enter this now, alternatively select F2 the following window appears:

Select the relevant movement type from the list in this case Purchase (PUR) and click select, the add security transactions window is updated:

Enter the remaining details, the completed window appears:

Press Enter, the transaction is written back to the client file and the window appears as follows:

The ISIN number is highlighted. Press Enter to continue entering transactions for Abbey National, or F2 to select in a different security.

Enter the remaining transactions for Abbey National:

The Security Transactions Window appears as follows:

Click New Security; enter the following transactions for the following securities:

1982 Pool

The 1982 Pool can be entered in two different ways. CCH SecTAX is a flexible product thereby allowing the user to either enter a pooled value inclusive of indexation where the base cost (original or March 1982 value) has already been established. If there is no indexation agreed balance we recommend that each transaction be entered separately as a normal purchase (using PUR); if the purchase date is prior to 31^st March 1982, a prompt appears asking for the March 1982 value to be entered. SecTAX uses the appropriate cost or market value whichever value gives rise to the higher amount of indexation.

Single Pool Entry

To enter the entire 1982 pool as a single pooled transaction including indexation you may wish to amend the existing movement code as follows:

The A7 rule means that the transaction is indexed from the Transaction Date even where a CGT Override Date has been specified. This allows the indexed cost to be taken on. The transaction date is typically 05/04/1998 and the CGT Override date is 31/03/1982. The taper relief is calculated using the CGT Override date in the usual way; the extra year for taper relief is allowed.

The P82 details would be entered as follows:

The completed window appears as follows:

Click OK.

Individual Transactions

If the indexed pool has not been agreed, it is always best to enter each transaction separately, indexation is then calculated and the transactions matched. Taper Relief is also allocated where appropriate.

The transaction as entered above is made up of the following individual transactions:

The completed window for the first entry appears as follows:

Note:

1.      The P82 transaction does not have a 1982 Market Value field. This is because with an A7 rule the 1982 value is ignored. This is why the CGT Override Value is filled in with the indexed cost of the higher of the original cost and the 1982 Market Value. However using the higher value is not always correct for CGT, e.g. if the securities are sold at a loss then the lower value is the correct CGT cost. This is a system limitation. Similarly if the original cost would give a gain and the 1982 value would give a loss then the shares should be disposed of as “no gain, no loss”; but with no 1982 value the system cannot make this comparison and the disposal would show a loss. In most cases 1982 acquisitions are sold at a large profit; in which case this would not cause a problem. However where a share has made little progress since 1982 and the problem does arise there are three ways around the problem:

• Enter the individual transactions instead of a pool transaction.
• Enter a single 1982 pool transaction using new movement code with an A1 rule and CGT override. This is unindexed and carries both the original cost and the 1982 Market Value. The transaction date is 05/04/1998 or whenever the pool was taken on, and the CGT Override Date is 31/03/1982. This method allows the system to switch automatically between the original cost and the 1982 Market Value as appropriate. It can be useful when unindexed data is available as at 1982. Where there were subsequent rights issues these need to be entered separately so that their indexation is correct. So although this method is more accurate, it requires more entries than the P82 entry when there were subsequent rights.
• If the shares are sold at a loss from the 1982 pool, make a retrospective adjustment of the CGT Override Value to set it to the correct CGT cost.

Most users either enter the individual transactions or a single indexed P82 transaction.

2.      The CCT Wizard has certain limitations in dealing with 1982 transactions:

• When the cost is transferred to a new security it uses P82 entries which, as explained above, give an incorrect result if the security is sold at a loss and may give an incorrect result if the security is sold for “no gain, no loss”. Where a P82 is sold at a loss it is advisable to check the calculation and adjust the CGT Override value if necessary.
• If an old complex capital event (i.e. occurred before 05/04/1988) is processed the Wizard may give an incorrect answer even if the security is sold at a profit. This is because of the way the Wizard works. The Wizard processes a notional disposal on the date of the complex capital event. The whole holding is notionally sold for a large sum. The Wizard then processes the cost that was matched to that disposal. Before 05/04/1988 rebasing of cost did not exist (although the indexation was based on the higher of the cost and the 1982 value). So when the 1982 value was higher the cost transferred to the new holding in the P82 entry was always based on the original cost. If the security is sold after 05/04/1988 the system can only use the original cost figure as the 1982 market value figure is not available in the entry.

Note: