Sharesave capital gains tax query

ImmyLFC

Hi all,

Wondering if someone can help, as the financial advisor at the bank does not seem to be interested in speaking to me!

In August my sharesave matures, I have 9688 shares brought at 0.68p and are now trading at £2.10.

On a rough calculation I end up with around 20k, which will effectively pay of my mortage.

What I need to know is how I stand with capital gains or any other tax situation.

Ideally what I want to know is when the sharesave matures, I want to lift the money and just pay my mortgage off, but if I do this what tax implications will there be?

Any help appreciated.

pjclar02

Hello there

So your total sale proceeds will be £20,344.80. Your total cost was £6,587.84, leaving a gain liable to capital gains tax of £13,756.96.

The first £10,600 will be exempt from capital gains tax.

Therefore you will be liable to capital gains tax on £3,156.96. If you are a basic rate taxpayer this will be taxed at 18%, or if a higher rate taxpayer this will be taxed at 28%.

So your tax bill will be either £568.25 or £883.95 (or a combination of rates if the gain means you straddle the two tax brackets).

You might want to consider disposing of most of the shares in March 2012, and then waiting for the new tax year to dispose of the rest to get a fresh capital gains tax annual allowance, which would mean you pay no tax.

You could also look at transferring some of the shares into an ISA before you sell them to avoid capital gains tax.

Hope this helps.

ImmyLFC

Thanks a lot.

I am a basic rate taxpayer. Could I transfer any to my partner at all? I have read somewhere you could do a gift or something?

I am tied in until August as I cannot do anything until then with the shares as it's an employee based scheme fixed for three years.