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  • FIRST POST
    • Lover of Lycra
    • By Lover of Lycra 5th Jan 18, 11:26 AM
    • 135Posts
    • 655Thanks
    Lover of Lycra
    Income Tax or Capital Gains Tax?
    • #1
    • 5th Jan 18, 11:26 AM
    Income Tax or Capital Gains Tax? 5th Jan 18 at 11:26 AM
    I work for an employee owned company and we have a share incentive plan where we can purchase up to £1,800 worth of shares each tax year. Usually for every share we buy we are giving one partnership share and one matching share so essentially three for one.

    If I sell my share after 5 years there is no tax to pay. If I sell my shares between 3 and 5 years I can keep my partnership and matching shares but I will be taxed. Which tax will I pay? The information from my employer suggests it would be income tax (see below) but a colleague who sold her share in the 3 to 5 year period contacted HMRC several times and each time HMRC insisted there was no tax to pay because she was within her CGT allowance for the year.

    Last edited by Lover of Lycra; 05-01-2018 at 1:11 PM. Reason: Realised one picture had too much personal information
Page 1
    • BoGoF
    • By BoGoF 5th Jan 18, 11:40 AM
    • 2,858 Posts
    • 2,106 Thanks
    BoGoF
    • #2
    • 5th Jan 18, 11:40 AM
    • #2
    • 5th Jan 18, 11:40 AM
    Income tax would be payable in these circumstances.
    • anselld
    • By anselld 5th Jan 18, 11:43 AM
    • 5,501 Posts
    • 5,093 Thanks
    anselld
    • #3
    • 5th Jan 18, 11:43 AM
    • #3
    • 5th Jan 18, 11:43 AM
    It is SIP scheme, so income tax is correct. Normally the scheme administrator would deduct the necessary income tax when you cash in.
    • Lover of Lycra
    • By Lover of Lycra 5th Jan 18, 11:56 AM
    • 135 Posts
    • 655 Thanks
    Lover of Lycra
    • #4
    • 5th Jan 18, 11:56 AM
    • #4
    • 5th Jan 18, 11:56 AM
    Thanks. I was inclined to believe the information from my employer.
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