Need help on shares, tax and I

quisait

Hi there

I am an employee of Santander and a couple of years ago we were given 100 free shares.

It has come to the point where I need to sell them to get at the cash. Apparently I will be subject to tax and NI on the sale???

Does anyone know how this all works and how I can work out what I'll get?

Thanks ever so!

Money_Grabber13579

Would it not be subject to CGT?

Pumpkinface_2

Money_Grabber13579 wrote: »

Would it not be subject to CGT?

It really depends on the specific circumstances.

If income tax were not due on shares we were given by our employer then then I guess we would all ask for part of our salaries to be paid in shares! So yes, income tax would normally be due on the value of the shares given, unless the shares are in some government approved scheme or as Jimmo stated, perhaps the employer has agreed to bear the cost.

If the OP has got share options as opposed to shares, then they would pay tax on the market value of shares on the day they exercise the option. If they have literally got shares, then I would have expected that they pay income tax on the shares on the day they came into their possession and CGT on the increase in share value at the point of sale.

sdooley

If it's 100 shares in santander it's not going to get anywhere near the CGT threshold.

There's income tax on shares gifted to employees, but the date the tax comes out could have been the date you received the shares (as above it depends on the exact scheme used) - maybe it was taken out of your salary at the time?

If any tax isn't taken off by your employer at source, the usual rules apply, i.e. you need to declare and pay the tax by 31 January following the end of the tax year.

p00hsticks

quisait wrote: »

Apparently I will be subject to tax and NI on the sale???

Like jimmo says, you really need to speak to your employer, as I beleive it will depend on whether or not the scheme was approved by HMRC and how long the scheme plans state they you need to hold on to them before.

My understanding is that there is usually a minimum period before which you cannot sell them unless you are leaving the company, and a further period after which you can sell but have to pay tax and NI. After a certain number of years you can sell them without having to pay any tax or NI at all (unless the profit you make is large enough to make you liable for CTG).

But this souhdl all be in the detail of the particular plan set up, so you need to ask Santander.