IanTHughes wrote:Dod101 wrote:After all, many holders (indeed most) will hold the same number of shares in Carillion that they had before it was suspended. Will that help them?
Incorrect again, sorry. Shares in Carillion PLC (CLLN) have been withdrawn so no-one holds any at all.
Sorry, but Dod101 is right about everyone who owned Carillion shares still owning them. They've become completely worthless and been suspended from trading on the LSE (*) and I'd be pretty certain any other stock exchange on which they were traded. And brokers have mostly ceased including them in their portfolio listings, but that's a matter of what the brokers tell their clients about worthless holdings, not of whether the holdings exist. FWIW, only one out of my four brokers still tells me about them (and even apparently gives me a chance to trade them - but produces an "Application error" when I try to get a quote). For almost all practical purposes, Carillion shares have ceased to exist, but legally they do still exist and are still owned by their former owners.
Why "almost all"? The answer is that it does make a tax difference to CGT - which is obviously only relevant for those who held the shares outside a tax shelter and whose realised capital gains and losses are sufficiently big to make CGT relevant to them. If they no longer owned the shares, they would have realised their capital loss on the date that they ceased to own the shares and would not have any choice about whether they had realised it or when. As it is, however, they haven't actually realised the loss yet and would have some difficulty actually realising it - but because they're worthless, they can make a 'negligible value claim' about them in their tax return (or by a separate letter). This allows them to be treated as if they had actually realised the loss on a date of their choosing, within certain restrictions that for Carillion currently amount to "between January 15th, 2018 and today". So in particular, they can currently choose to make that claim for a date between January 15th and April 5th and be treated as having realised the loss in the 2017/2018 tax year, or to make it for a date between April 6th and today and be treated as having realised the loss in the 2018/2019 tax year, or not to make it at all and so not to be treated as having realised the loss yet. Having that choice could affect a shareholder's CGT bills by up to 20% of the CGT allowance if it made the difference between the loss offsetting gains in a tax year when they would be covered by other losses and the CGT allowance, or gains in another tax year that would attract CGT. That's up to a four-figure sum, so not negligible!
So many will be totally unaffected in practice by the difference between Carillion shares no longer being owned at all and them being worthless and untradeable but still owned, but it is still an important practical difference for the rest.
(*) Possibly had their listing completely cancelled as well - I haven't checked, but if it hasn't happened yet, it will at some point in the future.
Gengulphus