Sharesave Scheme and Tax

The_Realist

I assume I instruct HL (or whoever I use) to take £11,280 woth of shares so they will take the correct number depending on the value. I can then withdraw to my own bank account.

The remaining shares stay with me and I sell some (and leave others)? [I've never exercised a share option scheme before].

Thanks again

gadgetmind

The_Realist wrote: »

I assume I instruct HL (or whoever I use) to take £11,280 woth of shares so they will take the correct number depending on the value. I can then withdraw to my own bank account.

Yes. On April 6th, they will move a full ISA subscription of shares, based on live value at the time, from your Fund and Share account to your ISA account. They drop in as a "Product Transfer" IIRC. Other providers will have their own systems along roughly the same lines.

Tell them exactly what you want them to do, make it clear they are SAYE shares, including a letter from comp sec, and re-iterate that the transfer is to be done without a disposal for capital gains purposes.

The remaining shares stay with me and I sell some (and leave others)?

Yes, you then get to do your own CGT calculations.

I've never exercised a share option scheme before

I've done a few now and still take a *lot* of care each time.

yorkyuk

So according to previous posts/calculations, if I have a share scheme that costs £9000 and the shares are now worth £25000 and I want to sell all the shares on maturity I would use the following calculations:-

£13,720.00
(ShareSave total minus ISA Allowance for the year)

£4,939.20
(Price paid for shares after transferring shares to an ISA)

£8,780.80 (The value of the shares left after transferring shares to
an ISA minus what they cost to buy = The Gain)

-£1,819.20 (The Gain minus The CGT allowance (£10600)).


So according to the above example I would pay no CGT and infact I would still have £1,819.20 of my CGT allowance lert for the Tax year 2012/13?

Is that correct?

gadgetmind

Warning: I haven't had my coffee yet!

But your numbers look right to me.

You can always double check by working out the gain in each share, then after the ISA transfer has been done you can calculate the total gain on the shares you will have remaining.

yorkyuk

Thanks alot...

glaw5

Hi, I've got a sharesave sceheme maturing on March 1.

In all these calculations is it important (as a 20% income tax payer) to remember if or how close you get to passing through the 40% income tax threshold as well?

Thanks in advance.

chris_m

glaw5 wrote: »

Hi, I've got a sharesave sceheme maturing on March 1.
In all these calculations is it important (as a 20% income tax payer) to remember if or how close you get to passing through the 40% income tax threshold as well?

AFAIK you only need to be concerned about that if you are planning on having a CGT liability because, AIUI, your highest income tax rate determines the CGT rate payable.
If you are able to (legally) avoid any CGT liability then it matters not what your income tax status is because there won't be any to be paid at any rate.

gadgetmind

chris_m wrote: »

your highest income tax rate determines the CGT rate payable

Pretty much,

Any gains above the £10.6k annual exemption are "stacked" on top of your other income and any below the 40% bracket is taxed at 18% and anything above at 28%.

chris_m

gadgetmind wrote: »

Pretty much,

Any gains above the £10.6k annual exemption are "stacked" on top of your other income and any below the 40% bracket is taxed at 18% and anything above at 28%.

Cheers Gadgetmind - not being a higher rate taxpayer and not planning on letting the taxman have any CGT whatsoever , I wasn't 100% sure of the detail.

akamustang

What is the relevance of these being SAYE shares or not?

Edit:
Ahhh, nevermind, I see now, you don't actually buy the shares as you go along each month, but instead at the end of the saving period and at the original share price.

So it's an instant profit with zero risk, not counting the risk that the share price increase might not be able to beat other investments.