timetotrade

This is the TimeToTrade help wiki. Use the TimeToTrade Trigger Trading Technology™ to execute your trades when Price, Candle Stick, Trend Line, Volume and Technical Analysis chart conditions are met - no coding required. Trade directly in the world’s global markets. Backtest your Trading Strategies. Calculate your UK HMRC Capital Gains Tax liabilities. Manage your Investment Club.


Return of Capital United Utilities

In December 2007, United Utilities completed the disposal of United Utilities Electricity. Following the disposal, United Utilities returned the net equity proceeds of the sale to their share holders. Approximately £1.5 billion equivalent to 170p per share was returned to shareholders in total.

This Return of Capital was implemented via a Capital Reorganisation and B-Share issue, whereby United Utilities plc became a subsidiary of a new company: United Utilities Group plc and each shareholder received:

  • 17 United Utilities Group Ordinary Shares for every 22 United Utilites Shares held as at 25 July 2008; and
  • one B-Share for each United Utilities plc Shares held as at 25 July 2008.



Returning capital via issuing B-shares gave shareholders a choice as to when and in what form they receive the Return of Capital. Shareholders could choose to redeem the B-Shares either:

  • on the Inital B Share Redemption Date (11 Aug 2008) @ 170p
  • on the Final B Share Redemption Date (14 April 2009) @ 170p; or choose to
  • receive a single dividend of 170p.


The new company, United Utilities Group plc commenced trading on 28 July 2008, this is deemed to be the effective date of the share reorganisation for tax purposes.

The B Shares were not listed on the London Stock Exchange.

Tax Treatment
For the purposes of the UK taxation of chargeable gains, the cancellation of the United Utilities Shares and the issue of United Utilities Group Ordinary Shares and B Shares is treated as a reorganisation of share capital. Accordingly, Shareholders are not treated as making a disposal in respect of the cancellation of United Utilities Shares or an acquisition in respect of the issue of the United Utilities Group Ordinary Shares and B Shares. For the purposes of calculating chargeable gains, the United Utilities Group Ordinary Shares and B Shares are treated as having been acquired at the same time and for the same consideration as the original United Utilities plc Shares.

In addition, the sale on behalf of Shareholders of fractional entitlements to United Utilities Group Ordinary Shares resulting from the scheme, does not constitute a disposal by UK resident Shareholders. The amounts of any fractional payments received by Shareholders from the sale of fractional entitlements to United Utilities Group Ordinary Shares should be deducted from the base cost of any United Utilities Group Ordinary Shares and B Shares received.

The original base cost (less amounts received on sale of any fractional entitlements, as referred to above) of the United Utilities plc Shares is attributed to both the United Utilities Group Ordinary Shares and the B Shares in proportion to the respective market values on the first day that the new United Utilities Group Shares are listed on the Official List.


Calculating Your Capital Gains
Assumptions:

  • Shareholder opted for Return of Capital via disposal of B-shares (rather than dividend)
  • Purchase 1000 shares in United Utilities plc (UU) on 1st August 2006
  • Original purchase price = 500p per share
  • Original base cost = 1000 x 500p = £5,000



Following the Capital Reorganisation, you will have:

  • Number of United Utilities B shares (UU_B Shares) = 1000
  • Number of new Ordinary shares held in United Utilities Group plc (UU-Group) = 1000 x (17/22) = 772.7273

This is rounded down to a whole number of shares = 772 with the 72p remainder paid as a fractional cash entitlement

Share price of redeemed UU_B Shares = 170p
Proceeds from redemption of UU_B shares:
= 1000 x 170p = £1,700.00

Share price of UU-Group on 28 July 2008 = 699.25p
Value of UU-Group shares on 28 July:
= 699.25p x 772 shares = £5,398.21

The original base cost (less amounts received on sale of any fractional entitlements) of the original UU shares is attributed to both the UU-Group Shares and the UU_B Shares, in proportion to the market values of the UU-Group Shares and the UU-B Shares on the first day that the UU-Group shares are listed

Original base cost = £5,000.00
Less fractional cash @ 72p = £4,999.28

Base cost for UU_B Shares is apportioned as:
(Value of UU_B shares redeemed) / (value of UU_B shares redeemed + value of UU-Group shares)

And base cost for UU-Group Shares is apportioned as:
(Value of UU-Group shares) / (value of UU_B shares redeemed + value of UU-Group shares)

Base cost for UU_B shares is:
= 1700 / (1700 + 5398.21)
= 0.239497 of original base cost
= 0.239496 x £4,999.28
= £1197.31

Capital Gain on redemption of UU_B Shares
= Base cost less Redemption proceeds
= £1,700 - £1,197.30
= £502.69

Base cost for the remaining 772 new UU-Group Shares is:
=5,398.21/(1700 + 5,398.21)
=0.760503 of original base cost
=0.760503 x £4,999.28
=£3,801.97



Using timetotrade's Share Reorganisation Wizard

Alternatively, you can use the timetotrade Share Reorganisation Wizard. The Share Reorganisation Wizard is included free as part of the timetotrade's basic portfolio tools.

To calculate your Capital Gains Tax liability using timetotrade, you firstly need to add the original share purchase to your portfolio:

United utilities 1.png

In this example we are saying we purchased 1000 shares in United Utilities plc (symbol UU.L) on 1st August 2006, at 500p per share. For the purposes of this illustration only, we will assume no commission or stamp duty was paid.

timetotrade provides share price data from multiple exchanges; in order to identify shares listed on the London Stock Exchange use the Reuters format with the suffix ".L" after the EPIC. In this example "UU.L"

To access the Share Reorganisation Wizard, click the "Share Reorganisation" button, as shown in the screen shot below.

United utilities 2.png

This takes you through to the Share Reorganisation page.

Step 1: Input the Date of the Share Reorganisation and click "submit". You can find this information in the Circular and Prospectus. For United Utilities' Capital Reorganisation, the effective tax date is given as 28 July 2008.

United utilities 3.png

Step 2: Select the company from your portfolio to which the share reorganisation is to apply, in this case select UU.L from the drop down menu.

United utilities 4.png

Step 3: Select the type of share reorganisation the company is subject to. In this instance United Utilities underwent a Capital Reorganisation, so select "Capital Reorganisation" from the drop down menu.

United utilities 5.png

You will then be presented with the following screen:

United utilities 6.png

There are two parts to the Capital Reorganisation:

  • Firstly an issue of 17 United Utilities Group Ordinary Shares for every 22 United Utilites Shares held as at 25 July 2008; and
  • Secondly an issue of one B-Share for each United Utilities plc Shares held as at 25 July 2008.



Step 4: Firstly input the 17:22 share issue:

United utilities 7.png

Symbol = enter the ticker symbol of the new United Utilities Group shares, in this case it is the same as the United Utilities plc ie, UU.L
Share Issue Ratio = enter the ratio of new to old shares, in this instance we are receiving 17 new shares for every 22 old shares held in UU.L
Shares Issued = as you have entered a share issue ratio you can leave this field blank and the number of shares added or removed will be based on the share issue ratio
Fractional Shares = No fractional shares were issued, so leave this field as 'no'
Issue Price = this is the market values of the United Utilities Group Ordinary Shares on the first day that the United Utilities Group Shares are listed on the Official List. The price is listed as being £6.9925 (input this figure in £pounds, rather than pence for UK stocks).
Cash Received = Enter here the fractional cash payment received. In this example, we received a fractional cash payment of 72p. Again, the value entered here should be in £pounds not pence for UK stocks).

Step 5: Add the B-share issue. Click the "add another" button. This will give you the following screen shot:

United utilities 8.png

Symbol = enter a symbol for the United Utilities B shares being issued. In this instance the B-shares are not listed on the Stock Exchange so we will make up our own symbol eg UU_B
Share Issue Ratio = enter the ratio of new to old shares, in this instance we are receiving 1 B-share for every old share held in United Utilities plc so the ratio is 1:1
Shares Issued = as you have entered a share issue ratio you can leave this field blank and the number of shares added or removed will be based on the share issue ratio
Fractional Shares = No fractional shares were issued, so leave this field as 'no'
Issue Price = you can find the issue price in the prospectus, it is listed as being £1.70 (input this figure in £pounds, rather than pence for UK stocks).
Cash Received = Leave this blank, as a 1:1 issue there is no fractional cash payment with the B-shares.

Input the fields as shown below:

United utilites 9.png

Once finished, click "submit". This will take you to the summary page:

United utilities 10a.png

Clicking on the "click here to return to ledgers" link will take you back to your portfolio ledger page. You can see that the share reorganisation has been successfully added with the basis costs appropriately adjusted for Capital Gains Tax purposes.

United utilities 11b.png


It has never been easier to execute your trading strategy. Our Trigger Trading Technology ® means you can now automatically execute your trades directly in the world’s global markets.


You need never miss a trading opportunity again!


Do you want to:

  • buy when your technical analysis chart conditions are met? Really buy, not just get an email or sms alert?
  • or sell when a support trend line is broken?
  • or back-test your strategy going back as far as 30 years?


TimeToTrade's Trigger Trading Technology™ is truly game changing. It gives you a trading advantage. The power to take your trading to a new level.


Open a FREE TimeToTrade account today to:


  • Trade UK, US and European Shares - apply now
  • Execute trades when your Price, Candlestick, Trend Line, Volume and Technical Analysis chart conditions are met using the Trigger Trading Technology® - learn more - help video
  • Email and SMS Trigger Trading™ Alerts - learn more
  • Trade Off The Chart - learn more
  • Back Test Trading Strategies with up to 30 years of historical data - learn more
  • Create Simulated Trading Accounts to test your Trigger Trading™ Strategies - learn more
  • Real time Forex, UK, European and US stock market data - learn more
  • 170+ Technical Analysis and Candlestick Pattern Indicators - learn more
  • All the tools you need to set up and run a successful investment club - learn more
  • Manage your Portfolio and calculate UK HMRC Capital Gains liabilities and SA 108 CGT Tax Returns - learn more
  • Create Trading Competitions for you and your friends - learn more
  • Apply for a trading account today to get the Live Account Features - apply now


Apply now to try our superb platform and get your trading advantage.



The information and data provided is for educational and informational purposes only. Interpretation and use of the information and data provided is at the user's own risk. All information and data on this website is obtained from sources believed to be accurate and reliable. However, errors or omissions are possible due to human and/or mechanical error. All information and data is provided "as is" without warranty of any kind. We make no representations as to the accuracy, completeness, or timeliness of the information and data on this site and we reserve the right, in its sole discretion and without any obligation, to change, make improvements to, or correct any errors or omissions in any portion of the services at any times. Past performance is not a guarantee of future results. Trading carries a high level of risk to your capital and can result in losses that exceed your deposits. It may not be suitable for everyone so please ensure you fully understand the risks involved.


All services are provided by TigerWit Limited. TimeToTrade is a trading name of TigerWit Limited (a company registered in England and Wales under number 9479466). Our Registered address is TigerWit, 7th Floor, Augustine House, 6A Austin Friars, London, EC2N 2HA, England. TigerWit Limited is authorised and regulated by the Financial Conduct Authority number 679941.


The trading services offered by TigerWit Limited are not available to residents of the United States and are not intended for the use of any person in any country where such services would be contrary to local laws or regulations. Subscriptions to TimeToTrade products are available if you are not eligible for trading services.


Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investor accounts lose money when trading spread bets with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. All clients should be aware that trading involves risk.

Retrieved from "?title=Return_of_Capital_United_Utilities&oldid=36389"