marks and spencers share. their FYE. tax question

mondaytuesday

Hi All

I have around 68k's worth of M&S share and need to cash them in fairly soon to help buy a house.

Sorry for being a bit thick here, but need some advice please.

Their FYE is coming up and I'm wondering if I could cash in half now and half after their FYE to avoid paying so much tax on the profit I've made.

Tax; am i taxed on the profit I've made, on the amount I originally paid for the shares, or the current price of the shares?

Also: what fees am I likely to pay to cash them in?

many thanks
katie

Mr_Mumble

Hi Katie,
You're correct in the assumption that selling some shares now (by April 5th) and some during the next financial year (April 6th onwards) could mean a lower capital gains tax liability.

Capital gains is calculated as:
(price sold at - selling costs) - (price bought at + buying costs)

Your CGT allowance, where you pay no tax, for 06/07 is £8,800, for 07/08 it will be £9,200. If you have a spouse these amounts can effectively be doubled by transfering ownership of some shares to them and then selling.

Taper relief and indexation allowance will also mitigate any tax due if you've had the shares for a while, especially if you're an employee of M&S.

If the shares are in certificate form then you should be able to sell for around the £20 mark. Its important to make sure that the broker you go through only charges a flat fee rather than a percentage with such a high value of shares.