Company Share Buy Scheme

Newbie2saving

opinions4u wrote: »

I worked for HBOS and invested all my evil bonuses in to company shares. I maxed out SAYE schemes. In the good years I did very well out of it.

But the final hit after they collapsed currently stands at a 98.5% loss in value - somewhere over the £40,000 mark.

At some point in the future look at selling and diversifying (in a way that doesn't hammer you for Captial Gains Tax).

Ouch, oh that is harsh, thanks for sharing with me as it teaches me that maybe these things aren't all they are cracked up to be! I will maybe play it safe with the approach I took with my other shares - what can I afford to loose...?

Lokolo

Newbie2saving wrote: »

Ouch, oh that is harsh, thanks for sharing with me as it teaches me that maybe these things aren't all they are cracked up to be! I will maybe play it safe with the approach I took with my other shares - what can I afford to loose...?

If it's the same as mine (I will assume SIPs are more or less the same), any dividends you get will roll over into shares and you are able to cash these in within 3 years. You may want to look to see if your company does issue dividends.

Do you know if you have web access to the scheme? It's very useful, you will information about how many shares you got in that month and when you can cash them in tax free. (assuming that the company used does the same sort of thing!)

MoneySaverLog

May be when you come to sell, sell some this side of the tax year and some in the new tax year to make use of CGT allowances on both sides of the tax years. Also I believe any other losses or cash used to buy the shares can be taken out before using the CGT allowance.

Newbie2saving

Lokolo wrote: »

If it's the same as mine (I will assume SIPs are more or less the same), any dividends you get will roll over into shares and you are able to cash these in within 3 years. You may want to look to see if your company does issue dividends.

Do you know if you have web access to the scheme?

I have web access, but only from a secured entry. I think you are right about dividends, but once again I will do the homework and report back as I am a little too vague on the specifics, I wanted to gauge opinion as I have never invested via this route before. They do pay dividends per share.
I know they call it a share buy and not a SIP, but probably the same thing?

Re the web access, you mean of the scheme once your in rather than giving info out now? I think I misunderstood your original post. No I don't know, another thinkg to ask, thanks.

Newbie2saving

MoneySaverLog wrote: »

May be when you come to sell, sell some this side of the tax year and some in the new tax year to make use of CGT allowances on both sides of the tax years. Also I believe any other losses or cash used to buy the shares can be taken out before using the CGT allowance.

This is where I start to worry - CGT, I don't really understand it - can I admit that here?!?!?!?!?!?!?!?!?!

I have been leaving the majority of investments up to an IFA, hence not really been delving too deep into this to date, but I know I need to understand it, it's just finding time to sit and study and work out how it applies to my circumstances.

gadgetmind

Newbie2saving wrote: »

This is where I start to worry - CGT, I don't really understand it - can I admit that here?!?!?!?!?!?!?!?!?!

Yes, yes, and thrice yes! We're not born understanding this stuff, it's complex and the rules keep changing. Don't ever hesitate to ask, but there is loads on the HMRC web sites to get you started.

Newbie2saving

Just as an update for all those that helped out initally with this query, I have signed up for the sharebuy scheme. It is all run online so you can see your statements etc. Company pays one share into your 5 bought. Thanks for all your help.

gadgetmind

Splendid!

BTW, what is the exact type of scheme? If it's SAYE then you can transfer the shares into an ISA at the end (subject to limits) and if it's a Share Incentive Plan it's even better as you can transfer them to a pension.

Anyway, lots of time until you need to worry about that.

Newbie2saving

gadgetmind wrote: »

Splendid!

BTW, what is the exact type of scheme? If it's SAYE then you can transfer the shares into an ISA at the end (subject to limits) and if it's a Share Incentive Plan it's even better as you can transfer them to a pension.

Anyway, lots of time until you need to worry about that.

It is a SIP. I haven't looked at the options for the end of the plan, I wasn't even aware there were options other than to keep or sell! Thanks. First contribution will be made through next months payroll.

gadgetmind

You can transfer an "ISA worth" (£10680 this yea, £11280 next year, etc.) at face value directly into an ISA within 90 days of exercise without their being a disposal for CGT purposes. If you time the exercise well, you can move two lots across.

With a SIP (but not SAYE) you can also transfer directly into a pension (usually a SIPP with two P's!) and not only isn't there a disposal for CG purposes but HMRC will also add on extra for tax relief at 20% or 40%.

Anyway, loads of time, but do your research at the end as there are plenty of neat tricks even if you just want the money there and then.