question re CREST Depository Interests and SA108 CGL declaration

Hello (NB system set thread as Discussion, I could not change it to Question) Are capital gains & losses derived from the sale of CREST Depositary Interest (“CDI”) representing overseas exchange listed shares & securities to be declared in the ‘Unlisted shares and securities’ section of the Self Assessment Capital Gains Tax summary SA108 CG 2 Boxes 31 to 36)? I invested in overseas securities over time in tranches via different online share dealing platforms available to a retail UK client like myself. On one of these platforms rather than dealing on the physical exchange listed overseas stock I bought and sold CDIs instead. As an example with one platform I bought and sold Apple Inc Common Stock (USD 0.00001 par value per share, stock listed on Nasdaq) while on the other I bought and sold CREST Depositary Interests (“CDI”) representing Apple Inc Common Stock USD0.00001 listed on Nasdaq. I understand that CDIs are UK registered securities that settle through CREST, with CREST holding in its name an equivalent number of corresponding shares with the Central Securities Depository of the home country of the underlying stock. I also understand that CDIs are unlisted securities themselves as they are not listed on an exchange. For the purposes of my SA108 Capital Gain/Loss declaration do I treat my overseas stock, eg Apple, gains/losses separately from gain/losses from my CDIs (declaring Common Stock gains/losses in the ‘Listed shares and securities’ section (SA108 CG2 Boxes 23 to 28) and declaring CDI gains/losses in the ‘Unlisted shares and securities’ section (SA108 CG2 Boxes 31 to 36)? So as an example if I sold on the same day all the Apple common stock and all the CDI representing the Apple common stock, it would count as two disposals - one listed and one unlisted - with two sets of Section 104 Holding allowable costs - one for the common stock and the other for the CDIs. Or, does HMRC “look through” (in this particular case and for the purposes of CGL SA108 declarations) both overseas listed common stock transactions and unlisted CDI (representing said overseas listed common stock) transactions treating both as if I sold the same listed overseas security, eg Apple common stock? In which case I would aggregate both physical stock and CDI purchases to obtain one set of Section 104 Holding allowable costs to then calculate appropriate ‘combined’ capital gains/losses? So as an example if I sold on the same day all the Apple common stock and all the CDI representing the Apple common stock, it would count as one listed disposal? I tried to find an explanation regarding calculating and declaring capital gains & losses arising from the sale of CDIs representing overseas stocks but I could not find it. Thank you. Regards Edward

Hi 

 It would seem from review of the info provided and guidance, that if DR’s issued via UK then you would be treated as the beneficial owner of the shares/securities.

UK law says that we would look through the depository to you being the holder of the shares, only if not considered as his would we consider there to be a separate holding and disposal.

As such the shares would then be either classed as listed or unlisted based on the company & share type.

Apple shares would be listed. Guidance advises that same class of shares in same Company held directly and through DRs are regarded as constituting a single shareholding.

Therefore, all shares in Apple of same class would be held in single S104 holding.

Based on this guidance you should be able to apply to your circumstance and then self-assess.

CG50240 - Definitions: depositary receipts

Thank you.