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 Vodafone Verizon
Vodafone realises US$130 billion for the disposal of its 45% interest in Verizon Wireless in September 2013. The Vodafone / Verizon Capital Reorganisation involves the return of cash plus the apportionment of cost with Vodafone shares quoted in Pounds and Verizon shares quoted in Dollars.
Some background reading that may be of interest:
The key points are that Vodafone will be returning capital to share holders via either Capital Gains or Income. The post focuses on the return of capital under UK HMRC Capital Gains Tax Rules where:
- 6 'new' Vodafone shares in place of every existing 11 Vodafone share as at close of business on 21 February 2014
- 0.0263001 Verizon shares for each Vodafone share as at close of business on 21 February 2014
- $0.4928 per share held at close of business on 21 February 2014
- Vodafone close price on 21 February 2014 was 236.50p
- Verizon close price on 21 February 2014 was $47.27, which is £28.44 in GBP
- GBP/USD exchange rate on 21 February 2014 was 1.66183
The return of capital under Capital Gains will be treated as a 'Capital Reorganisation' when using timetotrade. The following links provide some background reading on Capital Reorganisations, plus they provide an explanation of how 'Small' or 'Large' cash settlement amounts are treated:
If as part of the Vodafone Capital Reorganisation, if the cash issue settlement is greater than £3,000 and represents more than 5% of the market value of your Vodafone holding immediately before the Reorganisation, it is considered Large cash and cost will be allocated to the cash received to determine the profit on the cash received. If the amount of cash received is considered 'Small', the apportioned cost of the remaining Vodafone shares will be reduced by the value of the Small Cash, which in turn increases the profit, with the end result being that the Small Cash is taxed upon disposal of the Vodafone shares.
For this example, it will be assumed that 1,000 Vodafone shares where purchased on the 1st of January 2014 for 237p. The Vodafone share transactions have been entered into timetotrade as per the following screen shot:
To enter the Share Reorganisation, click on the 'share reorganisation' button below the 'Open Positions'. Set the date to the 21st of February 2014, which is when the reorganisation occurred:
Click on the 'submit' button then select Vodafone from the list of open positions on that date:
Click on the 'submit' button, then select 'Capital Reorganisation' from the drop down menu:
Click on the 'submit' button then enter the Vodafone share reorganisation details where:
- Share Issue Ratio is 6 : 11
- The share 'issue price' is the closing price of the Vodafone shares on the 21st of February 2014
- The 'cash received' is the Pounds value of the US Dollar amount of cash received, which in this example is set to a £300
Click on the 'add another' button to enter the Verizon details where:
- 0.0263001 : 1 Verizon share issue ratio
- Verizon close price on 21 February 2014 was $47.27, which is £28.44 in GBP at an exchange rate of 1.66183
Click on the 'submit' button to process the Capital Reorganisation. Upon viewing the Portfolio, note how the overall cost of the position is reduced £300, as the cash received in this example is treated as 'Small Cash'. This will result in the overall profit being increased when the shares are disposed:
The correct costs will now be apportioned when using timetotrade to Generate UK HMRC SA108 or Investment Club Tax Return form 185.
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 Mercor Index Ltd. TimeToTrade is a trading name of Mercor Index Ltd (a company registered in England and Wales under number 9479466). Our Registered address is 1st Floor, Aldermary House, 10-15 Queen Street, London, EC4N 1TX. Mercor Index Ltd is authorised and regulated by the Financial Conduct Authority number 679941.
The trading services offered by Mercor Index Ltd 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.