Whenever you choose to print a schedule you will be asked to specify whether you require the Proof or Final format.
The Proof format has been designed to be used as a working sheet and checking document and whenever a case is processed for the first time in a new year then the Proof format should be requested.
A Proof contains blue coloured information lines which have been designed to assist you in checking the Schedule by alerting you to alternative terms on take-overs, lapse payments, stock dividends, optional conversions and offers to subscribe for new shares, etc.
As a general rule whenever you are working through a Proof format schedule you will need to consider each of the information lines in detail.
Many of the information lines will simply be telling you about mandatory events such as a company name change in which case no specific action will be required.
However many of the information lines will be notifying you about non-mandatory events such as alternative terms on take-overs. For all such events you will of course need to establish what your Client elected to receive.
The typical type of questions you will need to answer when processing a portfolio are as follows;
- Were any dividends taken as shares? – CGT and Dividend Scheduling will provide an information line for all companies offering stock dividends and dividend reinvestment plans (DRIPs), detailing the terms of the offer.
If your Client has elected to take any of the dividends as shares you will need to make the appropriate entry on the Scrip Divs/DRIPs screen.
- Were any Rights Issues lapsed or sold? – If any of the companies on the portfolio had a rights issue then a series of information lines will alert you to the situation and provide details of any potential lapse payment.
If your Client has subscribed to the issue you will not need to take any further action as by default rights issues are assumed to be taken up by the system. If however your Client sold part, or all, of the allocation then you will need to enter the relevant details on either the Sales or Lapses screen.
- Are there any Foreign Investments? – If there are any foreign investments on the portfolio you need to check that the exchange rate used by the system to convert the foreign dividend into Sterling agrees with your Client's remittance voucher or bank statement.
If there is a material difference between the voucher and the amount calculated by the system then you will need to make an adjustment using the Dividends screen.
- Have any of the holdings been subject to a Take-Over? – If any of the securities on the portfolio have been taken over then a series of information lines will alert you to the terms of the take-over.
If alternative terms were offered then you will need to establish which of the various options your Client elected for. If your client did not elect for the basic offer then you will need to make a small adjustment to the portfolio - see Take Overs for full details.
- Does the portfolio contain any Non-Qualifying Offshore Funds? – These are funds that do not qualify for distributor status and as such gains on these investments are subject to income tax rather than CGT. However, there is no reliable data source currently available that identifies these Securities which means CCH have to rely on Customer feedback. If you receive feedback from a reliable source, such as a Stock Broker or Registrar, that a given Security is a non-qualifying offshore fund then please contact the Help Desk on 0844 5618181.
- Does the portfolio contain any Corporate Bonds? – There is currently no data source available that identifies definitively whether a corporate bond is a qualifying corporate bond i.e. exempt from CGT. In situations where a bond is not covered by a data source it will be treated, by default, as liable to CGT.
Complicated cases may need to be printed several times before you are happy they are correct although you will probably find that the length of time taken to process a portfolio will decrease as your experience in using the system grows.
You can always easily distinguish a Proof from a Final as it is annotated as "PROOF" on the footing line next to the date the schedule was printed.