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Capital Gains Tax

Information on calculating your liability

The following information may be relevant to you in computing your liability to capital gains tax.

1. Base cost adjustments

Adjusting events for shares held at particular dates are as follows:

(a) June 1983 3 for 1 capitalisation issue
The base cost of shares held immediately prior to the capitalisation issue must be divided by four.

(b) Demergers of Argos plc and Arjo Wiggins Teape Appleton plc (formerly Wiggins Teape Appleton plc)
The base cost of shares held in B.A.T Industries immediately prior to the demergers must be apportioned between the shares in the demerged companies and the continuing holding in B.A.T Industries shares. This is relevant for subsequent disposals of shares in B.A.T Industries, Argos, Arjo Wiggins Appleton (AWA), Allied Zurich (AZ) and BAT.

The relevant share prices on the first day of dealing were as follows:

(i) April 1990 Demerger of Argos

  • Argos – 199.5p
  • B.A.T Industries – 738.0p

The base cost of shares held in B.A.T Industries immediately prior to the 1 for 5 demerger of Argos should be apportioned as follows:

  • New base cost of 5 B.A.T Industries shares = 0.94871 x pre-Argos base cost of 5 B.A.T Industries shares
  • Base cost of 1 Argos share = 0.05129 x pre-Argos base cost of 5 B.A.T Industries shares

(ii) June 1990 Demerger of AWA

  • AWA – 208.0p
  • B.A.T Industries – 650.0p

The base cost of shares held in B.A.T Industries immediately prior to the 1 for 3 demerger of AWA should be apportioned as follows:

  • New base cost of 3 B.A.T Industries shares = 0.90361 x pre-AWA base cost of 3 B.A.T Industries shares.
  • Base cost of 1 AWA share = 0.09639 x pre-AWA base cost of 3 B.A.T Industries shares.

(Shares in B.A.T Industries held immediately prior to the Argos demerger and held until after the AWA demerger will require both the above two calculations to be performed.)

(c) May 1993 1 for 1 Capitalisation issue

The base cost of shares held immediately prior to the capitalisation issue must be divided by two.

(d) September 1998 Reorganisation and merger creating AZ and BAT in place of B.A.T Industries

British American Tobacco ordinary shares were listed on the London Stock Exchange on 8 September 1998 when it became the ultimate parent company of the businesses remaining after the demerger.

Shareholders of B.A.T Industries p.l.c. immediately prior to the demerger received 1 ordinary share of 25p in British American Tobacco p.l.c. and 1 ordinary share in Allied Zurich p.l.c. for every 2 shares they held in B.A.T. Industries p.l.c.

The relevant share prices on the first day of dealing were as follows:

  • AZ – 784.75p
  • BAT – 422.50p

The base cost of shares held in B.A.T Industries immediately prior to the reorganisation and merger should be apportioned between AZ and BAT shares as follows:

  • AZ – 65.003%
  • BAT – 34.997%

2. 31 March 1982 value

For the purposes of UK capital gains tax, the market value at 31 March 1982 of an ordinary share of B.A.T Industries p.l.c. was £4.075. For British American Tobacco (BAT) shares deriving from B.A.T Industries (BATI) shares held and retained since that date the adjusted price is £0.30562. This takes account of the 3 for 1 capitalisation issue in 1983, the two demergers in 1990, the 1 for 1 capitalisation in 1993 and the Allied Zurich (AZ) demerger in September 1998. The equivalent adjusted price for an AZ share is £0.56770. To determine the capital gains tax base cost of BAT shares and AZ shares, the base cost of BATI shares held at the time of the demerger should be apportioned at the rate of 34.997% for BAT shares and 65.003% for AZ shares. 
 
Additional adjustments may be required for:

  1. the enhanced scrip dividend (below); 
  2. any elections made under the former scrip dividend plan operated by B.A.T Industries from 1985 to 1997; and
  3. the current dividend reinvestment plan (below).

3. Enhanced Scrip Dividend

The adjustment to base cost of the pool required as a result of receiving the Enhanced Scrip Dividend under the terms of the circular dated 19 April 1993 is £4.1475 per new Ordinary share, being the 'quarter-up' price at close of business on 26 May 1993, the first day of dealing in the new Ordinary shares of B.A.T Industries.

4. Dividend Reinvestment Plan (DRIP) values

For capital gains tax purposes, the base cost of the British American Tobacco ordinary shares bought on your behalf under the DRIP, for calculating the chargeable gain or allowable loss arising from the sale, will be the price of the British American Tobacco ordinary shares purchased plus the stamp duty reserve tax and the transaction costs of acquiring those shares. Details of the stamp duty and the transaction fees can be found on individual participants share purchase advice statements despatched by the Company’s Registrars.

The following shows the purchase price of the British American Tobacco ordinary share purchased through the DRIP:

Dividend paid Purchase price of ordinary share (£)
27 April 2004 8.6040
15 September 2004 8.1279
4 May 2005 10.000225
14 September 2005 11.69
4 May 2006 13.863906
13 September 2006 14.996
3 May 2007 15.991
12 September 2007 16.445
7 May 2008 19.833
17 September 2008 18.10579
6 May 2009 16.3198
30 September 2009 19.8387
7 May 2010 20.434
29 September 2010  23.7937
6 May 2011 26.81243
28 September 2011 28.3351
3 May 2012 32.326374
26 September 2012 32.1639
8 May 2013 37.0367
30 September 2013 32.682142
8 May 2014 34.328367
30 September 2014 34.83242
7 May 2015 35.87359
30 September 2015 36.335075
5 May 2016 41.799803

 
Updated May 2016

Disclaimer

Non-UK residents
To calculate your Capital Gains Tax (or similar), please consult the tax office in the territory in which you pay your taxes.

UK residents
The Capital Gains Tax data given here is a guide only. If you have any doubts over your own tax position you should contact a professional adviser.

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