Sharesave scheme

opinions4u

we're told that we can pool three years CGT allowance because the scheme is spread over three years

Don't believe everything you're told.

Kittenkirst

Thanks for all your replies! Took the plunge & both my other half & I have started one this year which will mature at the a few months after our 3 year plan. We're now going for a 3 1/2 year plan instead! :cool2:

pvt

Seany wrote: »

we're told that we can pool three years CGT allowance because the scheme is spread over three years.

Well you've been told wrong - that's utter bollux.

What might have been meant is that you can sell a trenche each tax year up to the CGT limit, that way you have 3 years (until your next option matures) to dispose of them using 3 years' worth of CGT allowances. But of course you have to hold the shares longer, and there's the risk of their value falling meanwhile.

There are other ways of potentially mitigating the CGT liability, one of which is having them issued in joint names for you and your spouse when the option is exercised.

MoneySaverLog

Can you not also use a S&S ISA allowance to buy and then sell the equivelent of that years ISA allowance too as well as sell up to the CGT threshold in terms of profit made on the shares over the 5 years taking away any deductions in what you paid for the shares as well.

If the option date is Saturday 1st April 2017 and I'm able to sell on the Monday will I be able to do the above for the tax year ending in 2017 or would I miss the boat and have to use the following years instead?

chris_m

You can have the shares transferred into the ISA within 90 days of the acquisition.

Option date of 1st April "may" be a bit tight to get a transfer in done before the end of the financial year - but if your scheme administrators and ISA provider can handle the timescale then it should in theory be possible to get one year's ISA's worth transferred in before the tax year ends and another ISA's worth transferred in after the new year starts.

IF everything can be done in time you could also sell up to the CGT allowance in the first year (i.e. in the 3 working days after the option date) and a further tranche in the next year - combined with the two ISA tranches, that would take care of something over £40K's worth.

However that is only in theory, I fear the timescales may be a bit tight, especially if to take the shares outside the ISA you have to wait for certificates to arrive.

I will find out how things actually work in a few months time, when I have a scheme mature. I've already had an email with advance advice of the options, but have yet to be given the details - like, can my administrators transfer to an existing ISA that is not operated by them or do I have to take the shares and arrange the transfer myself.

redped

This link gives a bit more info on how the shares can be transferred to a S&S ISA - http://www.tddirectinvesting.co.uk/choose-an-account/trading-isa/faqs/ - about half way down the page is the relevant section. I assume most ISA providers allow you to do this, and work in the same/similar way to TD.

I've bookmarked it for when my sharesave scheme matures

pvt

The ISA route is helpful, but be aware that the limit you can transfer into the ISA is based on the current market value, not the exercise price you bought them for.