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UK individual Capital Gains Tax (CGT) and your BT shares

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Here is some general information you might find useful when you need to consider your UK individual CGT position generally and the CGT position for your BT shares specifically.

Nothing on this page can be read as financial advice, nor should the information on this page be relied on for tax purposes. No-one at BT or at Equiniti (BT’s share registrar and employee share plans administrator) can give you any financial advice or advice in respect of CGT.

If you are in any doubt about CGT, you may wish to consult a suitably authorised financial adviser.

What is Capital Gains Tax (CGT)?

CGT is a tax on the profit or gain you make when you sell, or otherwise dispose of, an asset such as shares. General information about CGT is available on the HM Revenue & Customs (HMRC) website at: https://www.gov.uk/personal-tax/capital-gains-tax 

You can also find general information about shares and UK CGT on the HMRC website at: https://www.gov.uk/tax-sell-shares

Will I have to pay CGT?

If you decide to sell assets such as shares, you may have to pay CGT if the gain you make (the positive difference between the cost of the asset (for CGT purposes) and the proceeds you receive on sale), together with any other CGT chargeable gains that you make in the same tax year, is greater than the CGT Annual Exempt Amount (£11,100 for the 2016/17 tax year and £11,300 for the 2017/18 tax year).

A liability to CGT can also arise if you give assets such as shares away. The gain is calculated by deducting the cost of the asset (for CGT purposes) from the market value at the time of disposal. This is a complex area and you are strongly advised to seek suitably authorised financial and tax advice.

How is CGT calculated on my BT shares?

You need to:

1. Work out the gain or loss. You need to identify which BT shares you sold to work out how much they cost for CGT purposes (the CGT base cost) using the following identification rules and in the following order:

  • Firstly, if you buy and sell BT shares on the same day (for example if you choose to buy saveshare shares at the end of the savings period and sell them immediately), you should match any of the BT shares you sold with the BT shares you bought on the same day and use the actual purchase price of the BT shares you bought on the same day as the base cost for CGT purposes;
  • Secondly, if you buy any BT shares within 30 days after a sale of BT shares, match the BT shares sold with BT shares bought in the following 30 days and use the actual purchase price of the BT shares bought in the following 30 days as the base cost for CGT purposes; and
  • Thirdly, match BT shares sold with all the BT shares previously purchased, aggregating all the purchase prices to create a pool of shares and purchase price. You then apply the purchase price pro-rata to the shares sold.

Here is an explanatory flow chart and some examples. You can also find more details and examples on the HMRC website.

2. Add together any other capital gains and take away any capital losses in the same tax year

3. Deduct your tax-free allowance (the ‘Annual Exempt Amount’ – £11,100 for the 2016/17 tax year and £11,300 for the 2017/18 tax year)

4. Work out the tax due on any gains that remain.

What’s the rate of CGT?

UK individual CGT on shares is chargeable at 10% for basic rate taxpayers for the 2016/17 and 2017/18 tax years. For higher rate taxpayers CGT on shares is chargeable at 20% for the 2016/17 and 2017/18 tax years.

Where do I get the CGT information I need for my personal BT shareholding?

It is your own responsibility to retain sufficient information for past share transactions to satisfy any tax obligations (such as contract notes; tax vouchers etc).

Please note that the BT share register managed by Equiniti does not include details of purchase prices for shares, as people can buy BT shares from many sources with different prices and they do not inform Equiniti, BT’s share registrar of the purchase prices.

Market price information

You can find the market value of shares at given dates.

Corporate transactions in BT’s history will affect how CGT is calculated. The latest corporate transaction was the demerger of mmO2 in November 2001. Further details can be found our listing history information

Further information for BT employees and ex-employees who are subject to UK income tax and acquired shares through BT UK employee share plans.

  • allshare/directshare shares are not included in the CGT pool while they are in the plan. If sold direct from the plan, they are CGT free but if they are transferred out of the plan into eg EasyShare they become part of the pool (at the point of transfer) and the CGT base cost is the market value of the shares (at the point of transfer)
  • For saveshare and other approved options, the CGT base cost for the identification rules above is the option price. You can view the history of BT’s Sharesave and saveshare plans
  • For unapproved options (this only applies to participants in BT’s Share Incentive Award (SIA) and Global Share Option Plan (GSOP)), the CGT base cost for the identification rules above is the market value at exercise (ie the price paid plus the amount charged to income tax)
  • Executive share plan (eg ISP, RSP and DBP) shares are subject to income tax on vesting, so the CGT base cost for the identification rules above is normally the amount charged to income tax on vesting (ie the market value of the shares on vesting)
  • The BT Employee Share Ownership Scheme (ESOS) 1984 - 2001 – the CGT base cost of the shares for the identification rules above is the initial market value of the shares. You can view the history of BT’s ESOS scheme .