Thomas Cook Group goes bust.

[monabri]

In the last 3 years, TCG never crossed my radar as being a potential HYP buy. I haven't looked but I dont remember seeing much discourse on it neither on the HYP Practical board.

I'd describe TCG as " Carillion with wings"...lots of debt and a margin from business activities which never would be able to pay it off and that's the reason why the Government decided not to back it as it was only going to fail in the future.

Oh, and the management team banked their bonuses as well!

[Gengulphus]

I held these as well as Debenhams, both outside an ISA

After DEB there was a teeny, tiny slim chance I might yet have made enough gains from other non-ISA shares to offset the capital loss by next April.

With TCG, now occurring in the same tax year, it'd take a miracle from here to end up with enough other gains to effect a net CGT gain by next April, even bedding and ISAing, etc.

You're working from a natural but false assumption here, namely that for CGT purposes you've had the Thomas Cook loss dumped on you by events. It has been dumped on you for most practical purposes - it would indeed take a miracle from here for you to recover anything from your Thomas Cook shareholding - but not for CGT purposes. The reason is that you still own your Thomas Cook shares: yesterday's events mean that they've become both untradeable on the markets and essentially worthless, but they haven't been confiscated from you. And that's important for CGT purposes because for CGT, you 'realise' a gain or loss on the shares when you 'dispose' of them, which means when you cease to own them.

So if you do nothing at all about the loss, it won't yet have been 'realised' and so won't yet be part of your CGT gains and losses. That situation will persist until one of two things happens: either you do actually cease to own the shares and so 'realise' the loss, or you make a claim to be treated as though you had done so.

Ceasing to own the shares can happen in a number of ways, the main ones being (a) transferring ownership to someone else - you can no longer do that by selling them on the market, but you can by a private sale for a token amount or by a gift; (b) it might be that there is a forced transfer of the shares - this is rare and I doubt that it's at all likely in this case, but it can happen; (c) at the end of the liquidation process, the company will be 'dissolved', meaning that it and its shares cease to exist, and at that point you'll cease to own the shares since you obviously cannot own something that doesn't exist. All of those methods have problems associated with them: for (a), they are that you need to find someone willing to accept them (*), that you need to know what paperwork is needed for a private sale or gift (not particularly difficult, but outside many shareholders' experience), that there might be problems getting your broker to implement the transfer if you own them in a nominee account or the company to register it if you own them certificated (**), and that CGT's 'market value' rule (***) means that you do need to feel able to demonstrate to HMRC that you've valued the shares correctly as virtually worthless (this doesn't seem at all likely to be a problem in this case, but can be in others). For (b), it's that a compulsory transfer probably won't happen, and even if it does, it will be at a time totally out of your control; for (c), it's that 'dissolution' of the company happens at a time totally out of your control and probably quite a few years after the company entered liquidation - which is fine if you don't turn out to want the loss in any of those years, but not so good if you do.

The alternative is to make a claim to be treated as though you had 'realised' the loss on a particular date. This is known as a 'negligible value' claim, and it's subject to some conditions, which are basically:

* the shares must have become virtually worthless (or of 'negligible value' in taxspeak) while you owned them;

* the date on which you claim to be treated as though you had 'realised' the loss must be after the shares became virtually worthless, and must be in the tax year that you make the claim or one of the preceding two tax years (if you make it in a tax return, it will normally be made in the preceding tax year, since you normally submit a tax return in the tax year following the one that it's about);

* once you actually do cease to own the shares, you can no longer make a 'negligible value' claim about them - you're stuck with the date that the loss was actually 'realised' and can no longer claim to be treated as though you had 'realised' it any earlier than that. In particular, if you get to the point when the company is 'dissolved' without having earlier claimed to be treated as having 'realised' the loss, you're stuck with 'realising' it when the company is 'dissolved'.

This method does have the potential problem of having to demonstrate to HMRC that you've valued the shares correctly as virtually worthless, i.e. one of the potential problems I've given above about actually disposing of them by a private sale or gift. It doesn't have the others, but it does have the issue of possibly finding out some months later that HMRC don't accept the claim - this seems unlikely in this case, but may be in others. If you end up making the claim close to the January 31st deadline, as is liable to happen if you send it in with your tax return and have the habit of putting off the unwelcome job of submitting a tax return, that could lead to you only finding out that it isn't accepted after the deadline for paying the tax, so that you incur penalties. And indeed, I think (though am not quite certain) that there's no real time pressure on HMRC about checking 'negligible value' claims (or indeed to check them at all), so that might well be capable of happening even if you submit your tax return long before the deadline. (The same applies to a private sale or gift, by the way.)

There are two ways around that problem. The first is that HMRC do publish a list of companies that have been quoted on the main market of the LSE whose shares they have accepted have become of 'negligible value': it can be found in https://www.gov.uk/guidance/negligible-value-agreements, specifically in its "Negligible value agreements and claims for previously quoted companies" section. That list doesn't get updated all that urgently - if you look at that page, you'll currently see that it says "Last updated 4 September 2019" about the page as a whole, but the list's description says "You can use it to find shares which have been declared as being worth negligible value up to 31 January 2019." And it also says that it doesn't cover AIM shares, Plus Market shares, unquoted shares or non-UK companies, which of course isn't any problem for HYPs that conform strictly to this board's guidance, but seems worth mentioning just in case there are any non-conformists around... ;-). But note that there isn't any real urgency about keeping the list up to date - neither Debenhams nor Thomas Cook currently appears in it, but both of those collapses led to trading being stopped in the current 2019/20 tax year, the shares had a non-zero market value up to that point (so a 'negligible value' claim would not succeed for any earlier date), and the deadline for a 2019/2020 tax return is about 16 months away, on 31 January 2021.

What all that does mean is that if you find a share in that list, a 'negligible value' claim will succeed provided you make it for a date on or after the "Effective date", unless the company has been dissolved (basically as indicated in the "Dissolved" column, though I don't know how quickly that column gets updated when a company is dissolved - it might be worth double-checking the company at Companies House if in doubt). It doesn't mean that if you don't find the share in the list, a 'negligible value' claim will be rejected - it might just be that such a claim hasn't yet been considered, or possibly even hasn't yet been made.

So basically, it's a shortcut for easy cases: look at the list to see whether the company is there. If it is, a 'negligible value' claim is a formality: as an example, I owned Carillion shares when it went bust in January 2018. I did want the loss for my 2017/18 tax, as I'd made some large gains elsewhere, so I did put a 'negligible value' claim into my 2017/2018 tax return when I got around to submitting it. The entirety of that claim was as follows:

"Negligible value claim

I claim that shares in Carillion plc were of negligible value on 15/01/2018, as stated in https://www.gov.uk/guidance/negligible-value-agreements."

inserted at an appropriate point in my CGT computations. (I suspect even that wasn't actually needed - just stating the loss in the CGT computations would probably be treated by HMRC as implicitly making the negligible value claim - but including such a claim explicitly was dead easy and got rid of any doubt about whether I'd made it.)

For completeness, the other way around the problem applies to any company AFAIAA: you can send HMRC a stand-alone 'negligible value' claim (i.e. one not accompanying a tax return) to give them as much time as possible to consider whether the shares are indeed of 'negligible value', and you can accompany such a claim with a request for a post-transaction valuation check to make certain they get back to you with a "yes" or "no" answer to that question. (You do commit to the claim - i.e. to being treated as 'realising' the loss if the answer is "yes" and there's no other problem that leads to HMRC rejecting the claim, so don't do it if you don't want that treatment.) Such a claim is likely to be more effort (see HMRC's helpsheet HS286 about what you need to do), but it's pretty unlikely to be needed for big main market shares (i.e. all normal HYP shares) unless you're in a great hurry to get the matter dealt with many months in advance of the normal tax return deadline.

I'm afraid the above is rather long on detail, but the gist of it is quite simple: when a company goes bust you don't normally (****) automatically take the loss there and then for CGT purposes. Instead, there will normally be a long period (a number of years is typical) during which you can choose when to take the loss for CGT purposes, and if you don't actively take it during that period, you will normally end up taking it at the end of the period. You can actively take it by selling the shares privately to a willing buyer (with the payment obviously being a token payment only given that the shares are essentially worthless), by giving them away to a willing recipient, or by making a 'negligible value' claim about them to HMRC. For a typical HYP share, the last of those options is very simple.

(*) Depending on who you know and how well they understand such matters, this could be anything from dead easy to virtually impossible - many people steer well clear of involving themselves in any financial transaction they don't understand, many others will do so quite easily provided they trust the other party sufficiently...

(**) CREST accounts might fall in either camp - and by the way, in all of this I'm using the word "might" to mean I've no practical experience of doing such things and so cannot say anything much about how likely such problems are - about all I can say is that I doubt that anyone will treat transferring the ownership of worthless assets as any more of a priority than they're legally obliged to...

(***) This is the rule that if you dispose of an asset to any 'connected person' or not by means of an at-arm's-length commercial transaction, you have to treat it as being disposed of at its fair market value, not at what you actually received for it.

(****) The "normally"s are because I have experienced one case where a HYP company arguably went bust and this didn't apply. That was Bradford & Bingley, which was nationalised in September 2008 without compensation, that lack of compensation being argued to be justified on the grounds that the company was insolvent. That nationalisation involved a compulsory transfer of the company's shares to the Treasury (point 7 of the link) and so the loss was 'realised' then and there.

So from a practical point, as someone who doesn't normally need to do a tax return...

• Can these losses be carried forwards to offset future capital gains?
• If they can, when April arrives, what will I need to do to effect that? I was able to report taxable dividends to HMRC of over £2000 for the previous tax year just by phoning them. Can that be done for capital losses, or would they need full details of the calculations on a tax return?

The answer to your first question has three parts:

First, if you have more losses than gains 'realised' in a tax year, you can carry your net gains 'realised' in the tax year forward to the next tax year. To avoid doubt, that means your gains 'realised' in the tax year minus your losses 'realised' in the tax year, with no account taken of the CGT allowance for that tax year. E.g. if you have 'realised' capital gains of £20k and capital losses of £30k in the current tax year, you can carry £30k-£20k = £10k of losses forward to next tax year - it is not valid to try to say that your CGT allowance of £12k absorbs £12k of gains, leaving only £8k that require losses to be offset against them, so that you have £30k-£8k = £22k of losses to carry forward. (Nor indeed is it valid to try to argue that you don't want to use any of the losses 'realised' this tax year and will pay the CGT on the £8k of capital gains this year in order to have £30k of losses to use next tax year - it might be something you want to do if you're sufficiently convinced that next year's CGT rates will be a lot higher than this year's, but the rules don't allow it.)

Put another way, you must use losses 'realised' in a tax year to offset gains in the same tax year as far as possible - the only thing that stops that and allows further losses to be carried forward is running out of gains to offset.

Secondly, once a loss has been carried forward at least once, it becomes a brought-forward loss - and the rules for dealing with brought-forward losses are different to those for dealing with same-year losses. You're still obliged to use brought-forward losses to offset gains, but only down to the point where the remaining gains are equal to the CGT allowance: you can then leave those remaining gains to be dealt with by the allowance. So if for example you have £20k of gains and no losses realised in the current tax year, but £30k of losses brought forward from the previous tax year, then you do only use £8k of those brought-forward losses to offset against the gains, and the remaining £30k-£8k = £22k of brought-forward losses get carried forward again.

A summary of those first two points is that they effectively say "Use the same-year losses first, then the CGT allowance, then any brought-forward losses. Do each stage as far as possible before moving on to the next. If you've got any gains left at the end, CGT is due on them; if you've got any losses left at the end, they can be carried forward; if you've got any CGT allowance left at the end, it's wasted."

Thirdly, I should note that carrying forward of losses only ever happens one tax year at a time. They can end up effectively being carried forward unchanged through a tax year - that happens if you have no more than the CGT allowance worth of gains after offsetting same-year losses, but you cannot carry losses forward e.g. directly from the 2017/18 tax year to the 2019/20 tax year without checking that the rules do indeed leave them unchanged in the 2018/19 tax year.

To sum up the answer to your first question, therefore, you may be able to carry some of the losses forward to offset gains in future tax years, but not all of them unless you have absolutely no gains in the same tax year, and none of them if you have at least as many gains in the same tax year as you have losses. And you don't get a free choice which future tax years those gains are in: once losses have been 'realised', they're dealt with by fixed rules (which is one of the reasons why it can be important that you do normally have some choice about when you 'realise' the losses when a company goes bust).

One other point that can be relevant: there is no limit to how many times losses can be carried forward by the fixed rules for doing so once they are recognised by the CGT system as having been 'realised'. But there is a limit to getting a loss recognised by the CGT system as having been 'realised'. That limit is that you must have told HMRC the details of the loss by the end of the 4th tax year after the loss is 'realised': if you miss that deadline for telling HMRC about the details, then you have in fact 'realised' that loss but you will never be allowed to offset it against any gain and so for all practical CGT purposes it doesn't exist. Telling HMRC the details of a 'realised' loss is known as claiming the loss: don't get confused between making a 'negligible value' claim to cause a loss to be treated as though it had been 'realised', and claiming a 'realised' loss - they're two different things and both may need to be done after a company goes bust.

A consequence of that is that if you 'realise' more gains than the CGT allowance in a tax year, you're almost certainly going to need to tell HMRC about your CGT situation sooner or later, regardless of how many losses you also 'realise' in that tax year. That's because the various rules work in a Catch-22 fashion with each other: specifically, if you're sent a tax return, you have to fill it in according to its instructions and they say that you have to give CGT details if your gains are over the CGT allowance before offsetting losses; if you're not sent a tax return and you don't have enough 'realised' losses to offset the gains down to below the CGT allowance, then you owe HMRC CGT and are legally required to tell them about that situation by the October 5th six months after the end of the tax year concerned; if you're not sent a tax return and you do have enough 'realised' losses to offset the gains down to below the CGT allowance, you're still going to have to tell HMRC the details of those losses within the 4-year deadline or you can never use them and you will owe them some rather severely overdue CGT... (And I think that in either of the last two cases, HMRC are likely to respond by sending you a tax return, putting you into the first case...)

That leads into the answer to your second question: I'm fairly certain you can tell HMRC about your CGT situation by phoning them, as you did for your dividends. But don't be surprised if they respond by sending you a tax return to complete - and if they do send you one, you're obliged to do so, with very few exceptions. (There is an exception for them having sent you the tax return by mistake, but a "mistake" in that case is something like sending you a tax return when they meant to send it to someone else of the same name. In particular, sending you a tax return and it turning out that you don't owe them any tax is not a mistake: the basic purpose of a tax return is to establish how much tax you owe them, so it being a "mistake" for them to send you a tax return if that amount turns out to be zero would be putting the cart before the horse...)

Gengulphus

[Alaric]

So from a practical point, as someone who doesn't normally need to do a tax return...

[list]
[*] Can these losses be carried forwards to offset future capital gains?
[*] If they can, when April arrives, what will I need to do to effect that?

In the lengthy post by Gengulphus, he notes that there's sufficient flexibility in the rules for you to determine when the shares are written off as of no value. I think that means that on 5th April 2020, you can regard yourself as still holding Thomas Cook and you notionally dispose of them on 6th April 2020. As to whether HMRC have to be informed, they aren't interested when the gross gain (ie before offsetting Debenhams, Thomas Cook etc.) is still less than the CGT Allowance.

[Lootman]

if you're not sent a tax return and you do have enough 'realised' losses to offset the gains down to below the CGT allowance, you're still going to have to tell HMRC the details of those losses within the 4-year deadline or you can never use them and you will owe them some rather severely overdue CGT.

If you are correct about that, and it was also true about 20 years ago, then I probably erred in a couple of years' tax returns. That's because there were a couple of years when I did not need to submit a tax return, but where I stayed within the annual CGT-free allowance only because I subtracted some realised losses from my realised gains. I took the view that there was no need to report the situation at all.

To put it as a contemporary example, I might have had £15K in realised gains for the year and £4K in realised losses. Since they net out to £11K which is less than the annual £12K CGT-free allowance, I simply ignored it all for tax reporting purposes.

I had assumed, perhaps wrongly, that you only need to report losses if you DON'T use them in the same tax year. After a couple of years I started being unavoidably subject to CGT anyway and so then did full disclosure each year as required.

Regarding the main issue (and I know we have had this discussion before) one idea with these worthless positions is to sell them privately, for a peppercorn amount. So you might sell the right to the shares for a pound, effectively realising a loss in the current tax year without having to wait for when HMRC decides they are officially worthless.

The one time I did this, my holding was in certified form, so it was a simple matter to hand the certificate over to a willing colleague for a notional amount, and claim the loss. If it were a nominee holding, that would be trickier as I'd probably want to transfer the position into my own name, and I'm not sure you can do that if the share is no longer listed.

Of course, if you do this and by some miracle the shares become worth something again, then that is a risk.

[88V8]

....someone who doesn't normally need to do a tax return...

• Can these losses be carried forwards to offset future capital gains?
• If they can, when April arrives, what will I need to do to effect that? I was able to report taxable dividends to HMRC of over £2000 for the previous tax year just by phoning them. Can that be done for capital losses, or would they need full details of the calculations on a tax return?

Bad luck.
As someone who has been lumbered with a tax return for years, I can't tell you how minimal your paperwork could be, perhaps just write HMRC a letter, but yes you can carry the loss forward.

V8

[Gengulphus]

if you're not sent a tax return and you do have enough 'realised' losses to offset the gains down to below the CGT allowance, you're still going to have to tell HMRC the details of those losses within the 4-year deadline or you can never use them and you will owe them some rather severely overdue CGT.

If you are correct about that, and it was also true about 20 years ago, ...

Apart from some exceptions about very old losses which I felt were extremely unlikely to be relevant (*), I am correct about it, and can point you at the instructions for filling out a paper tax return as evidence of that - the relevant bit is in https://assets.publishing.service.gov.u ... 0_2019.pdf, on page 4:

"7 Capital gains summary

Fill in the ‘Capital gains summary’ pages and attach your computations if:
...
• your chargeable gains before taking off any losses were more than £11,700"

It was essentially also true 20 years ago - the deadline for claiming losses was a bit more relaxed then (it was the January 31st about 5 years and 10 months after the end of the tax year in which the losses were realised, rather than the April 5th 4 years after the end of that tax year) but that's a bit of a detail. The relevant question on the tax return was "Were your total chargeable gains more than £6,800?" (on the 1998/9 tax return) and realising that that meant the gains before offsetting losses did require very careful reading of the instructions for both the main tax return and the Capital Gains supplementary pages - the answer was clear when you looked at exactly what the phrase "chargeable gains" was defined to mean, but I would agree that it was easily misread if one failed to pay attention to the exact wording and definitions.

There is however a more significant difference if "about 20 years" is a few years more than 20. The need to claim losses and the deadline for doing so came in for the 1996/97 tax year, and losses realised in the 1995/96 tax year or earlier have never subsequently been made subject to any deadline for claiming them - so they can still be claimed and used even if you've never told HMRC about them before now (see https://www.gov.uk/capital-gains-tax/losses, which notes this exception). There might be other differences about losses that old - e.g. while I think they would still be subject to the rule about carrying losses forward one year at a time and accounting for them correctly in each year they pass through, rather than carrying them forward directly from the tax year in which they were realised to the tax year when you want to use them, I don't actually know that that's the case.

And I'm pretty certain that there's a yet bigger exception about even older losses, namely that losses realised before CGT was introduced in 1965 aren't usable at all and/or something about the date in 1982 that I've seen mentioned in quite a few CGT-related documents - I can (and do) dismiss all such material quickly as not relevant to me since the earliest that I ever acquired any asset that CGT applies to is 1983 or 1984, so I don't know the details - just that there are rules about that 1982 date.

(*) The exceptions certainly aren't relevant for the Debenhams and Thomas Cook losses that onthemove specifically mentioned. They might conceivably be relevant for other losses that are part of onthemove's overall CGT situation, but it seems very unlikely...

Regarding the main issue (and I know we have had this discussion before) one idea with these worthless positions is to sell them privately, for a peppercorn amount. So you might sell the right to the shares for a pound, effectively realising a loss in the current tax year without having to wait for when HMRC decides they are officially worthless.

Yes, as I said you can do that - I used the words "token amount" rather than "peppercorn amount", but I think we can agree that that's just a rather arbitrary wording choice! You do take the risk that HMRC don't eventually decide that they are officially worthless, of course, but that risk seems virtually non-existent in this case, and in any case that risk exists both for such a sale and for a 'negligible value' claim, so it's not a deciding factor between them.

As for the "having to wait" aspect, waiting can be a good thing. In particular, when a loss is practically certain to continue to be available, it's generally better CGT planning to wait until as late as reasonably possible before deciding whether you want to realise it, to avoid possible nasty last-minute surprises (i.e. you deliberately realise a loss because you want it to offset a gain, then later in the tax year a corporate action forces you to realise a different loss that would have done the job - but is now going to be wasted offsetting gains that would have been dealt with by your CGT allowance anyway). So if I owned shares in Thomas Cook (which I don't), I would be waiting until at least March next year before doing any of a private sale, a gift or a 'negligible value' claim with them. By then, I suspect HMRC will have made and published their decision - Thomas Cook is quite a high-profile case, receiving media attention akin to that paid to Carillion in early 2018, and Carillion was added to their negligible value list on 10 April 2018, a bit under 3 months after the announcement of its compulsory liquidation.

And yes, I know we have had much of this conversation before, and I've no real desire to repeat it - that's why I did mention private sales and gifts as well as 'negligible value' claims. I did have a bit more to say than I did last time, basically because I didn't have any experience of a main market holding of mine going bust before, other than the atypical and arguable one of Bradford & Bingley. So Carillion was my first actual experience of basing a 'negligible value' claim on HMRC's negligible value list (I hadn't been lucky enough to completely avoid companies that went bust before, but they were all AIM companies and so the list was useless for them). As I indicated, it was very easy for Carillion.

The one time I did this, my holding was in certified form, so it was a simple matter to hand the certificate over to a willing colleague for a notional amount, and claim the loss. ...

If that's all you did, I think you left the sale in a rather incomplete state - the notional amount of money had changed hands and the share certificate had changed hands, but the shares probably hadn't. In particular, the share certificate probably certifies that you as a named individual own the shares, so even after the certificate was in the hands of your colleague, it will still have said that you were the owner of the shares, not that your colleague was. And the company's share register, which I am fairly certain is actually the master source of information about the legal ownership of shares, will clearly not have been updated, since the company won't have known anything at all about the private sale.

To complete a private sale (or a gift) of a certificated shareholding in normal circumstances, what needs to be done is sending the certificate to the company's registrars with a completed stock transfer form. They record the changed ownership in the company's share register, issue a new certificate to the buyer (or gift recipient) in their name, and destroy the old certificate in the seller's (or donor's) name. Failure to do this correctly can lead to all sorts of administrative mess as dividends, voting forms, etc, are subsequently sent to the wrong person...

When it's a company that has gone bust and is in the hands of administrators or liquidators, such administrative mess isn't likely to be much of a problem - so I'm basically just saying that to avoid anyone thinking that all that's needed for a private sale of certificated shares is for the buyer and seller to exchange a share certificate for the purchase price: that will definitely cause problems if attempted in normal circumstances. For a company that's gone bust, it seems unlikely to result in more administrative mess than a letter or two from the administrators/liquidators informing you of what is happening going to you rather than your colleague - and quite possibly not even that, as administrators/liquidators are under very little obligation to keep shareholders informed. In the probably-unlikely event of HMRC ever formally enquiring into your tax affairs in detail, though, you might have some trouble establishing that the sale ever really took place: it would be a matter of your and your colleague's word against what the share certificate and the share register say... So I certainly wouldn't expect trouble from doing it that way, but there is a (hopefully very small) chance of trouble.

I do realise of course that you might have dealt with a private sale correctly, and merely over-simplified your description of what you did a bit. If so, that's no real problem, but I still feel it worth saying this to avoid readers being misled into thinking that private sales of certificated shares are quite that simple!

... If it were a nominee holding, that would be trickier as I'd probably want to transfer the position into my own name, and I'm not sure you can do that if the share is no longer listed.

Nor am I - that transfer depends on the company updating its share register to remove the appropriate number of shares from the registered (and almost certainly uncertificated) holding of your broker's nominee company and to record a certificated holding in your name of the same number of shares, as well as issuing the share certificate to you. And while I know that in normal circumstances, the jobs of maintaining the share register and issuing share certificates are done by the company's registrar, I don't know what happens to them for a company that has gone bust and is in administration or liquidation - it could be anything from continuing to be done completely normally to not being done at all.

I would expect though that the same answer applies to whether it's possible to 're-materialise' a nominee holding to certificate form and whether it's possible to complete a private sale of a certificated holding properly with a stock transfer form, since both depend on what happens to the jobs of maintaining the share register and issuing share certificates.

Gengulphus

[Alaric]

And I'm pretty certain that there's a yet bigger exception about even older losses, namely that losses realised before CGT was introduced in 1965 aren't usable at all and/or something about the date in 1982 that I've seen mentioned in quite a few CGT-related documents -

When CGT was first introduced by the 1964 Labour government, it was only gains after 1965 that were to be taxed. The changes in 1982 rebased the effective date for CGT so as not to impose tax on gains arising from the inflation of 1970s. I think there were other changes to the CGT rules, so the rebasing was part of a more general reform. With mass privatisation then having started, holders of BP from many years ago may be able to use this concession. As you suggest, applying tax only to gains after a certain date also excludes losses before that date from counting.

[Lootman]

To complete a private sale (or a gift) of a certificated shareholding in normal circumstances, what needs to be done is sending the certificate to the company's registrars with a completed stock transfer form . . .

I do realise of course that you might have dealt with a private sale correctly, and merely over-simplified your description of what you did a bit. If so, that's no real problem, but I still feel it worth saying this to avoid readers being misled into thinking that private sales of certificated shares are quite that simple!

I cannot recall exactly now, but I almost definitely would have done that. At the time I held a lot of certificates, from new or privatisation issues, investment trusts savings schemes and so on. So I was accustomed to completing stock transfer forms for sales, gifts and transfers, and in fact had a folder full of such forms. I may still even have them in my attic somewhere.

Based on your other comments it would appear that I failed to provide details of my gains and losses in a couple of years when I should have done. That said the tax due was not affected and no CGT would have been due anyway. So I will put that down as a misdemeanour rather than a felony.

[bionichamster]

In the last 3 years, TCG never crossed my radar as being a potential HYP buy. I haven't looked but I dont remember seeing much discourse on it neither on the HYP Practical board.

I'd describe TCG as " Carillion with wings"...lots of debt and a margin from business activities which never would be able to pay it off and that's the reason why the Government decided not to back it as it was only going to fail in the future.

Calling it "Carillion with wings" is only really helpful if you can reliably identify it as such before its value is destroyed. In retrospect it's always easy to spot the really bad investments (they are of course the ones that lost you all your money, or someone else all of theirs) but if you can't reliably spot them before they start destroying your investment it's not much use. We should also beware the broken clock approach of detecting lots of problems and refusing to invest in lots of companies, and then proclaiming our talent at spotting dogs when one goes bust ignoring the other fifteen that have survived and/or prospered..... and for the sake of transparency that's similar to my approach and it's not massively successful !

Setting discussion of strategic ignorance aside for a moment, if we were to list the highest profile HYP candidates of the last 15-20 years that have gone seriously t*ts up (i.e. bust) is there a common theme(s) that could be used to flag up a warning when examining other companies regarding a HYP investment? Although I can't remember TC being seriously discussed for HYP over the last 18 or so years (however long the HYP discussion has been going) although it may have raised its head for some for a brief time.

What HYP shares have died or as good as (as far as shareholders are concerned) in the lifetime of HYP and what were their warning signs?


Bh

[Gengulphus]

Calling it "Carillion with wings" is only really helpful if you can reliably identify it as such before its value is destroyed. In retrospect it's always easy to spot the really bad investments (they are of course the ones that lost you all your money, or someone else all of theirs) but if you can't reliably spot them before they start destroying your investment it's not much use. We should also beware the broken clock approach of detecting lots of problems and refusing to invest in lots of companies, and then proclaiming our talent at spotting dogs when one goes bust ignoring the other fifteen that have survived and/or prospered..... and for the sake of transparency that's similar to my approach and it's not massively successful !

Setting discussion of strategic ignorance aside for a moment, if we were to list the highest profile HYP candidates of the last 15-20 years that have gone seriously t*ts up (i.e. bust) is there a common theme(s) that could be used to flag up a warning when examining other companies regarding a HYP investment? Although I can't remember TC being seriously discussed for HYP over the last 18 or so years (however long the HYP discussion has been going) although it may have raised its head for some for a brief time.

What HYP shares have died or as good as (as far as shareholders are concerned) in the lifetime of HYP and what were their warning signs?

Mostly agreed - but it's not enough to look at past HYP candidates that have gone bust and identify "a common theme(s) that could be used to flag up a warning when examining other companies regarding a HYP investment". One must also look at past HYP candidates that have not gone bust (and especially those that have gone on to do well) and see whether those themes are common among them as well - if they are, the theme is not a good warning flag. It's only if the theme is common among HYP candidates that have gone bust and considerably less common among those that have not gone bust that one has potentially identified a good warning flag. Edit: This does of course mean that one needs to look at a lot more HYP candidates, which implies a lot more time and effort is needed for the exercise - but nothing promises that discovering good warning flags is going to be easy!

As regards Thomas Cook being seriously discussed in the past, as I've indicated earlier in the thread I do remember that happening. But it was during the 2008-2010 period when there were major events happening elsewhere in the HYP share universe, so I'm not at all surprised if those other events have completely overshadowed it in various people's memories! Indeed, they've nearly done so in mine - all my memory is really clear about is that I saw it discussed on the TMF board, considered purchasing it and rejected the idea.

Gengulphus

[monabri]

"Carillion with wings" - Massive revenues (£8 to 9 billion) and generally negative earnings since 2013 except for 2016 when they achieved +£60m. I'm surprised it lasted so long TBH. Thus there was no robustness...

[bionichamster]

but it's not enough to look at past HYP candidates that have gone bust and identify "a common theme(s) that could be used to flag up a warning when examining other companies regarding a HYP investment". One must also look at past HYP candidates that have not gone bust (and especially those that have gone on to do well) and see whether those themes are common among them as well - if they are, the theme is not a good warning flag. It's only if the theme is common among HYP candidates that have gone bust and considerably less common among those that have not gone bust that one has potentially identified a good warning flag.

Gengulphus

I kind of took it that this would be the obvious thing to do, to anyone considering, but thanks for the clarification.

BH

[Itsallaguess]

Setting discussion of strategic ignorance aside for a moment, if we were to list the highest profile HYP candidates of the last 15-20 years that have gone seriously t*ts up (i.e. bust) is there a common theme(s) that could be used to flag up a warning when examining other companies regarding a HYP investment?

Although I can't remember TC being seriously discussed for HYP over the last 18 or so years (however long the HYP discussion has been going) although it may have raised its head for some for a brief time.

What HYP shares have died or as good as (as far as shareholders are concerned) in the lifetime of HYP and what were their warning signs?

I haven't taken any great interest in Thomas Cook at all as a possible income-investment option, as I tend to agree with others who look to this sector as one to avoid, but I do remember reading articles discussing the company over recent years, and a recurring theme seemed to be that it had structural issues with regards to free cash flow.

Free cash flow (fcf) has been discussed a few times over the years with regards to it being a good pointer for the robustness of a company for income investment, and if there were multi-year problems with Thomas Cook in this area, then that sounds like it could have been used as either a deterrent to investment in the first place, or a warning sign to exit the investment with some capital intact.

Free cash flow figures are not the easiest financial statistics to gather for income investments, but a number of discussions have taken place here and back on The Motley Fool over the years with regards to gaining visibility of them and of even calculating our own.

Some topics here -

https://www.lemonfool.co.uk/viewtopic.php?f=15&t=5831&p=61186#p61186

https://web.archive.org/web/20170619145604/http://boards.fool.co.uk/free-cash-flow-worked-example-12192723.aspx?sort=whole

https://docs.google.com/spreadsheets/d/1fyV9lMcKJBPtG4ExuyVQWG_C5BO_Gsy27MUP5Gq5H3U/htmlview?authkey=CK3wiqAF&hl=en_GB#gid=0

Cheers,

Itsallaguess

[Gengulphus]

but it's not enough to look at past HYP candidates that have gone bust and identify "a common theme(s) that could be used to flag up a warning when examining other companies regarding a HYP investment". One must also look at past HYP candidates that have not gone bust (and especially those that have gone on to do well) and see whether those themes are common among them as well - if they are, the theme is not a good warning flag. It's only if the theme is common among HYP candidates that have gone bust and considerably less common among those that have not gone bust that one has potentially identified a good warning flag.

I kind of took it that this would be the obvious thing to do, to anyone considering, but thanks for the clarification.

I've seen too many posts along "I wanted to learn the lessons of my investments in ABC and XYZ having gone wrong - so I looked at them and I found they both had such-and-such a feature. So I'm swearing off investing in shares with that feature." lines. In quite a few of those cases, it has not been hard to find plenty of other HYP shares that had the same feature and hadn't gone wrong - or even had gone spectacularly right!

So while I agree it should be obvious, I'm not convinced it actually is obvious to quite a few people around here. And by the way, I'm not saying that you or anyone else in particular are included among those people - just that I've seen enough such posts to make me reckon it worth pointing out that it's a good idea to check 'warning flags' for tendencies to cry "Wolf!" unnecessarily...

Gengulphus

[Dod101]

[So while I agree it should be obvious, I'm not convinced it actually is obvious to quite a few people around here. And by the way, I'm not saying that you or anyone else in particular are included among those people - just that I've seen enough such posts to make me reckon it worth pointing out that it's a good idea to check 'warning flags' for tendencies to cry "Wolf!" unnecessarily...

That sounds a very wise comment but I would rather avoid a great construction company (if such a company exists) than hold a Carillion when it goes bust. Thus I avoid supermarkets, support services and contractors without even looking at the candidates. There are plenty (or at least enough) of other fish in the sea........

Dod

[tjh290633]

What HYP shares have died or as good as (as far as shareholders are concerned) in the lifetime of HYP and what were their warning signs?


Bh

I can tell you which shares that I had fell by the wayside.

The first example was Marconi, formerly GEC, which went up like a rocket in 2000 only to fall like the proverbial stick. I originally bought in 1989 at 272p, and added to them at prices down to 180p. I took profits twice at 979p in 1999 and at 1183p in 2000. I got out in 2002 at 22p.

My next was Mapeley, bought at 3362p in 2007 and I got out in 2009 at 51p before they were taken private, after Fortress got a major holding.

Following that was Premier Foods, bought in 2006 at 319p and sold in 2010 at 36p.

Cattles was bought in 2008 at 176p and realised 1p when wound up in 2011. I got one dividend only.

Carillion, of course, needs no introduction.

TJH

[monabri]

Interserve...I didn't get a single dividend..extremely bad timing on my part ( one of my earliest buys) when starting my HYP.

[yieldhog]

Talking about Mapeley, has anyone seen any information in the past year or two that shows that Mapeley Limited has any residual value?
I still hold some in my SIPP and would dearly love to eliminate them from the SIPP but can't find any way to achieve that.
I would be happy to give them to charity but to do that I'm told I need to obtain a fair market value, which doesn't seem to exist.
Looking at the accounts for Mapeley Estates I would hazard a guess that Mapeley Limited has negligible value but how can I prove that to my SIPP Trustee?

Is there anyone on this Board in a similar situation i.e. Mapeley shares in a SIPP or ISA?

[PinkDalek]

Talking about Mapeley, has anyone seen any information in the past year or two that shows that Mapeley Limited has any residual value? ...

valueinvestor123 asked a similar question back in November 2018. Rather than divert this Thomas Cook topic, perhaps you should ask him if he got anywhere further over here:

Mapeley
viewtopic.php?t=14820