Your MoneyQ&A

Working out tax on share sale when I have lost the details of when they were bought

Revenue assumes the first shares you sell in a company are those you bought first: you need to track down details to work out your gain or loss

Bank of Ireland shares bought as a retirement next egg are now trading at a substantial loss. Photograph: Aidan Crawley/Bloomberg
Bank of Ireland shares bought as a retirement next egg are now trading at a substantial loss. Photograph: Aidan Crawley/Bloomberg
Dominic Coyle's picture
Dominic Coyle
Sun Feb 09 2025 - 19:02

My wife & I are in the process of selling an investment property on which we will be liable for capital gains tax.

We are in our mid-60s and over the past 40 years we have invested in stocks and shares, mostly in the Bank of Ireland. This was going to be our nest egg when we retired but the 2008 share crash put a halt to that dream.

We are now considering selling some Bank of Ireland shares on which there will be a capital loss which hopefully we can offset against the capital gain. The problem is that we have mislaid or lost a sizeable portion of the early records relating to the purchase details of those shares.

However, we have details of some of our later purchases which show the number of shares purchased, the price per share and the amount paid. Accordingly, with those purchase details, we can estimate the capital loss on their sale.

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We are aware that in July 2017, every 30 shares in our Bank of Ireland shareholding were converted to one share with a new single certificate replacing all the old certificates and we are allowing for that conversion in our calculations.

Do you think our proposed plan is feasible and would be acceptable to the Revenue Commissioners?

Mr P.McM

I know it is of no use to you at this point, or consolation, but could I please urge everyone who is investing in anything to keep records.

We all tend to accumulate a mountain of paper over our lifetimes and, without a doubt, it will matter to no one, ourselves included, if we were to be more ruthless in clearing most of it out. Old receipts, out-of-date guarantees, newspaper clippings, bank statements, utility bills ... the list is endless and the advice that none should be kept for longer than absolutely necessary well-founded.

For receipts backing up claims you have made to Revenue for reliefs, credits or tax offsets, that can be six years. Most other things can be done away with before that, only keeping a record of account numbers and providers in case of a future query.

Most, but not all. If you are investing in shares, bonds, funds and even An Post savings, certain details need to be kept – in some cases even beyond their redemption.

But we’ll come back to that another day. For now, let’s stick with your shares. If you invest in shares, later sell them and make money, keep the receipts for the six years after that year in case Revenue comes looking. If you sell at a loss, keep the details for at least those six years, and longer if you still have some of those losses to offset against other gains.

And if you have not yet sold your shares, make sure you retain indefinitely the paperwork that details when they were bought, by whom, through whom and at what price.

Your Bank of Ireland shares prove the point. You say you have invested in these for the past 40 years. Even if you wanted to, many of the stockbrokers who existed in Dublin back then have faded into history in a succession of mergers, takeovers and retirements. Even if you knew which broker you dealt with, they and the relevant paperwork may no longer be accessible.

Even if you dealt through Davy or Goodbody – the only stockbrokers to have been in business across all that window – they might no longer have the details you require.

The other “official” source of those details would be the company’s share registrar – in this case, Computershare. I have no idea how long they have been registrar but, even if they were able to track each and every share transaction of yours down the years, there would likely be a charge involved and it could be steep.

The only place that leaves is the media. That might work if you were in the habit of buying at specific times of the year – following bonuses, year-end, bank results or whatever. If you have the specific date of your share purchases or even a rough date, you can find the price the shares traded at on back issues of The Irish Times epaper on our app.

For a company like Bank of Ireland where the share price has varied widely over the years, it might at least get you closer to a figure that would satisfy Revenue.

You say you do have details of some of your more recent and that you can estimate the capital loss on those shares but that won’t work, I’m afraid.

When it comes to multiple investments in the share asset – Bank of Ireland shares in this case – Revenue rules dictate that transactions operate on the Fifo rule, first in, first out.

So when you sell, they assume you are selling the oldest portion of your holding – the first of the shares you bought all those years back – not something more recent. And just because you have accurate details of the more recent acquisitions in this case, and can therefore accurately work out your loss, you do not have the freedom to choose to do so.

If you started buying the shares as far back as 40 years ago, they were trading at about £4.10 in Irish decimal money. Converting to euro, that amounts to €5.20.

But then you have to take account of indexation that applied for capital gains tax purposes back then – right up to 2003. This was a multiplier set by the Revenue each year to take account of the impact of inflation on the purchase price of your asset.

You can find the list of multipliers by searching online for capital gains tax multipliers Ireland, or just click here.

For that illustrative February 1984 share purchase, the multiplier is 2.003. Multiplying your €5.20 purchase price for these shares by that multiplier gives you a new “base price” for those shares of €10.43.

But you then have to allow for the consolidation. As you say, back at the end of March 2017, the bank consolidated its shares so that shareholders now held one share for every 30 shares they held previously.

So one share that closed on Friday at €9.69 equates to 30 of the “indexed” shares bought in 1984 for the equivalent of €10.43 – or €312.90 to be precise.

Of course, you will have to figure out how many of the shares you hold translate back to that original purchase but, as you can see, each of them that you sell now will be trading at a loss of in excess of €300.

The only thing I can say for certain is that your entire holding will be sold at a loss but the key question is how much of a loss.

The shares were trading below those 1984 rates for chunks of the early to mid-1990s. But then they were trading far in advance of that price in the Celtic Tiger years before the crash that more or less wiped out your retirement finance plans.

So, no, I do not think Revenue will accept you selling shares you bought more recently before those you bought previous to that. And nor would they accept the capital loss assessed on those shares as representing the accurate loss on shares you have held for longer and will now be deemed to be selling.

Given the surge in Bank of Ireland’s share price in advance of the collapse, allowing you to do so would distort the scale of your losses in your favour.

Revenue will be clear that you have a capital loss to offset but it is up to you to accurately assess the scale of that loss as capital gains tax returns are self-assessed. I think you have a bit more work to do before filing any tax return on any sale of these shares but, given how early in the year it is, you have some time on your side.

Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to dominic.coyle@irishtimes.com with a contact phone number. This column is a reader service and is not intended to replace professional advice

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