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Avoiding CGT by putting shares in isa
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# 1
monkfish
Old 11-04-2007, 10:46 AM
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Default Avoiding CGT by putting shares in isa

hi i wonder if anyone can help me.

I am in a sharesave scheme whereby money is deducted from my salary every month and after 3 yrs the total saved is given a bonus interest of around 5% and then this money is used to buy shares in my employer at a discounted rate. Basically after 3 yrs i will have put in 9000 and the shares i get would be worth today around 27K.

Now does this mean that if i sold them instantly i would be liable for 27k - cost (9k) - cgt allowance (9K i think) so 9k in capital gains tax.

Basically i've heard that i can avoid this by putting the shares into an isa can anyone elaborate

thanks in advance
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# 2
RabbitMad
Old 11-04-2007, 11:40 AM
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Yes, you will only be liable for CGT when you sell or give them away.

If you are amrried or in a civil partnership you could transfer some to your OH and then you'd have two lots of CGT allowance to use.

Alternatively sell some now and wait until the next tax year to sell the rest.

I think to put them in an ISA would mean you'd need a self select ISA and you would only be able to shift 7K's worth in a year.
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# 3
cheerfulcat
Old 11-04-2007, 11:48 AM
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Hi, monkfish,
Quote:
Now does this mean that if i sold them instantly i would be liable for 27k - cost (9k) - cgt allowance (9K i think) so 9k in capital gains tax.
Not quite; it would be £9000 of gains liable to tax at 20% or 40% depending on your tax status.

Quote:
Basically i've heard that i can avoid this by putting the shares into an isa can anyone elaborate
You can move the shares into an ISA without crystallising a gain under certain circumstances; have a look here.
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# 4
monkfish
Old 13-04-2007, 12:47 AM
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so it looks like i can sell 18k worth instantly and put 7000 worth into a isa leaving me with just 2k that would be subject to cgt?
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# 5
agal
Old 13-04-2007, 3:08 PM
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Quote:
Originally Posted by cheerfulcat View Post
Hi, monkfish,


Not quite; it would be 9000 of gains liable to tax at 20% or 40% depending on your tax status.



You can move the shares into an ISA without crystallising a gain under certain circumstances; have a look here.
Surely 27k - 9k means there would be 18k of profit liable to CGT?
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# 6
cheerfulcat
Old 13-04-2007, 4:14 PM
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Quote:
Originally Posted by agal View Post
Surely 27k - 9k means there would be 18k of profit liable to CGT?
It's 27,000 - 18,200, actually; you take away the cost ( 9000 ) and then use the CGT exemption ( 9200 for the current tax year ). This leaves 8800 of gains liable to CGT.
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