Saveshare, CGT and the NEW ISA

Your logic looks good to me.

agster wrote: »

Hi both,

I think I've found the answer in an email that was sent to us within our company. It's all in the small print (in red) as usual although they've got the 1 and 2 mixed up. It appears that I can use my 15K ISA allocation but my mrs can't use hers... totally illogical to me but guess alot of tax rules are :-)


Example 2: Alex decides to buy the shares and:
•
transfers half to her spouse/civil partner 1
•
both Alex and her partner sell shares to use all their 2014/15 CGT limits of £11,000 each
•
Alex transfers the maximum to an ISA in her name within 90 days of purchase 2
•
both she and her partner decide to keep the balances in EasyShare.
1 The spouse/civil partner can’t transfer shares into an ISA in their name in the same way as the saveshare participant. Shares would need to be sold (and so potentially liable to CGT) and then repurchased into the ISA.
2 The special tax rules allowing the spouse to sell shares and use their own CGT allowance only works for spouses and civil partners. They don’t work for other partners or relatives/friends etc. In those cases the shares are deemed to have been disposed of at the market value on transfer and are potentially liable to CGT on the saveshare participant.

You can still recycle a significant amount into your wife's ISA by gifting half to her (which she'll acquire at your cost) and then selling some of her shares and then buying back within the ISA (called bed and ISA) which will move approx £13,000 to a tax free environment without paying any CGT. She'll then be left with a balance of shares to bed and ISA in future years - maybe another 2 years worth - or she can gift some back to you for you to bed and ISA.

Bed and ISA means selling outside an ISA and then buying back inside it usually at exactly the same time to avoid market movements. When she sells she will trigger CGT so you need to see just enough shares to get to her CGT allowance but no more unless you want to pay CGT. She will inherit your original cost so 61p a share and you have yourself worked out that at £4 a share she can sell nearly £13k worth to achieve that aim. She then puts the cash into an ISA and buys the shares back at £4. She could of course buy other shares if preferred.

She then repeats this in subsequent years as dictated by the price of the shares which puts further gains within the ISA wrapper. However, I'm not sure that is what you want to do - if all you want to do is sell the shares and spend the cash then you simply transfer half and utilise her CGT allowance each year until you've sold them all.

agster wrote: »

Thanks for explaining that bud.

Yeah we've got a wedding to pay for (I described her as my wife for ease of explanation and yeah I know I can't transfer any shares exempt of CGT until we tie the knot) and a few other things as well so trying to get as much out as possible really.

Am I also correct in saying that I'll only be able to whack £15000 of my shares into an ISA within the first 90 days (so the example our company sends out)... therefore that is purely a one off and I won't be able to do this each Tax year?

Therefore 14/15 ~41K
and 15/16 ~26K and so on...

the ability to transfer direct to your ISA within 90 days is a special 'privilege' available only to you and only for the first 90 days.


you can transfer any amount of shares to your wife without paying tax, but if she then sells then the cgt is worked out on your original purchase price and she is taxed accordingly but can use her own cgt allowance .