Salary sacrifice non-cash bonus into SIPP

planetjakob

Hi,

I have seen it discussed that it is possible to 'salary sacrifice' your bonus into your SIPP. I was wondering if this was also possible if your bonus was non-cash, a share option for example. If it is legally possible, would the same tax implications apply as if it were cash?

Any guidance would be greatly appreciated.

Regards,

Jack

gadgetmind

planetjakob wrote: »

I have seen it discussed that it is possible to 'salary sacrifice' your bonus into your SIPP. I was wondering if this was also possible if your bonus was non-cash, a share option for example. If it is legally possible, would the same tax implications apply as if it were cash?

Share options are usually subject to Capital Gains taxation rather than taxation as income, but some unapproved schemes and restricted share schemes etc. have it as income.

What does the paperwork regards this share option say on the subject?

BTW, approved options can be moved directly into an ISA (subject to ISA limits) within 90 days of exercise. If you time it right, you can get two batches in, one in each tax year, and you can also "double dip" for CGT allowances.

planetjakob

Thanks for your speedy response. My primary concern is the legitimacy of such an action (transferring non-cash bonus as salary sacrifice into SIPP), as I have seen no guidance on this or previous example cases. All guidance on this refers to salary sacrifice as cash. The tax implications are something to worry about afterwards! The paperwork I have to hand says the share option should be treated as an 'employer contribution' if this helps.

gadgetmind

planetjakob wrote: »

The tax implications are something to worry about afterwards!

I always find it better to understand the tax situation up front.

The paperwork I have to hand says the share option should be treated as an 'employer contribution' if this helps.

That doesn't mean much to me. My share options are always either "buy xxx shares at price yyy on date zzz and worry about the CGT when you sell" or "get xxx shares given on date zzz and pay tax and NI on the full amount you're being given". For the latter, I use sal sac to make the additional income "go away", but I'm sacrificing salary and the shares are a separate issue.