CGT on Share Options

ec9wrr

Hello All,
I hope someone will be able to help me (even just a little!) with the below...

In the next couple of weeks I have some Management Share Options coming up to the time that I can exercise them.

2072 approved shares at 13.99.
Current price is around £29.

Taking aside fluctuations in the share price, I'm trying to work out the CGT implications of selling enough shares to cover the purchase of all remaining shares so I can hold as shares. Then I can use CGT allowance each year to sell some off (and gift some to wife once married later this year).

How do I calculate the CGT on doing this (I'm a 40% tax payer). When I come to sell the shares in the future I presume I would pay CGT on the difference between £29 (price now) and selling price (if over CGT allowance)?

I can only exercise all 2072 approved shares now so want to know if the above is more effective than selling all shares straight away and just paying a lump sum on capital gains.

If I was to ask an IFA for further advice - what should I look for in choosing an IFA and how much should I expect to pay for advice on this?

Thanks very much.

ermine

Your capital gain is simply the difference in price between what it costs you to buy and what you realise on selling. That would be the option price, not the current £29 share price, unfortunately!

So you buy 2072 shares at £13.99, say you can sell them at £28.99 then your gain is (£28.99-£13.99)*2072=£31080

If you want to know how many shares you can sell for you £10,600 CGT allowance (may be different next year) then you take you gain per share of £15 and calculate 10600/15 = 706 shares.

HMRC guidance on CGT is here