Shares released early from company scheme

Kellm9

Hi,

I have just received shares from my company scheme. They were released early due to sale of the company. I have no income tax, cap gains or NI liability.

My question is - Is it worth me transferring some of these into an ISA ? From what I have read I think I can transfer them straight into an ISA without having to sell them (special circumstances). Am I right in thinking that the only benefit would be to receive dividents tax free ? However would it really be worth doing after admin fees etc ?

I'm not really sure what to do so any comments / suggestions would be greatly appreciated.

Regards
Kellm9

goodword

I have just been investigating a similar situation to the one you describe and I believe if you want to transfer the shares you must do so within 90 days of exercise of option.

Since April 2004, dividends earned within an Isa have been taxed at 10% - the same rate basic-rate taxpayers pay on those earned outside the wrapper. High-rate taxpayers save 22.5%.

The threshold for CT this tax year is 8,500. As the new tax year starts on something like April 5th you could sell some before then and some in the new tax year.

I ended up getting a share certificate for my company shares as the company broker's charges were too high i.e. 0.5% rather than Squaregain's 12.50 per trade. It took 30 days to get the share cert. My options now are to send the share cert to Squaregain and they will add to my nominee account which takes 7-10 days (may take longer nearer the end of the tax year, HSBC was telling me 4-6 weeks !!) or I can sell the certificate through https://www.shareview.co.uk. The online rate is a flat 25 quid but tele is tiered and much more expensive. Sounds convoluted but it will save me a few hundred quid.

ISA's do quite often have charges so so it depends on the value of your holding and whether you want to hold or sell. Perhaps look at the charges for the usual brokers e.g. Squaregain, Hargreaves-Lansdown .

Kellm9

Thanks goodword,

Yes 90 days is correct. The CGT does not really apply, although I have £25,000 worth of shares. The price for CGT purposes is the price at exercise of option and not price I paid (thankfully). I intend to hold for a while, then maybe split between wife and sell small amount as and when I need some cash.

I thought about putting them into an ISA but could see no real benefit. So I have taken the share certificate and transferred it into my Halifax dealing account where I can sell at fixed £11.95 trade.

Cheers
Kellm9

EdInvestor

Regarding tax on dividends, basic rate tapayers pay none and higher rate taxpayers 25% outside an ISA.

Thus for BRTs, the ISA is only useful for CGT purposes: for HRTs, it's useful for both divis and capital gains.