Keep in Company Share Plan or Put into Save-To-Buy

Th1984

Hi,

I am chewing over a decision and wondered if MSE had any useful input.

The first batch of my company share plan holdings have reached the end of the holding period and are eligible for me to cash in £900 ish tax free. The share plan is my main method of building a deposit to buy a house.

I have a save to buy account with nationwide which I am putting a token £50 per month into whilst we pay down our debt to 0.

My dilemma is I am tempted to cash the shares in and put the proceeds into my S2B account to bolster the balance. A 'real' cash balance looks more attractive than nominal share value which can rise or fall in line with the market.

However the shares are returning roughly 9% in dividends and the price has not changed materially in 18months. The dividends get put 33% debt, 33% saved, the rest goes in tax.

Any thoughts?

Vortigern

Holding the shares of a single company is risky. What happens if your dream house buying opportunity comes along when the shares are at a low point.

I used to have some BT shares worth £15 each. I still have some of them, now worth £2.40

Should I have sold them?

latecomer

Does the company share plan give you a discount on the market price? If so then pay into it and then sell the shares as you get them to make the guaranteed gain. Then put the proceeds of the sale into your house save-to-buy account.

marvin

Or split it sell some and keep some put cash raised into the cash account.

Th1984

Yer,

There is a substantial discount if you hold them for 5 years. I am leaning towards sale.

somethingcorporate

Vortigern wrote: »

Holding the shares of a single company is risky. What happens if your dream house buying opportunity comes along when the shares are at a low point.

I used to have some BT shares worth £15 each. I still have some of them, now worth £2.40

Should I have sold them?

Better selling them now than when they were at 65p a share not so long ago!

I'd certainly take the security of money in the bank over single company shares now that they are tax free.

Vortigern

@somethingcorporate - thanks for the reply, but it was a rhetorical question!

somethingcorporate

Vortigern wrote: »

@somethingcorporate - thanks for the reply, but it was a rhetorical question!

As was my response. It's all relative and to do with timing and we were both alluding to the fact the value of shares can go up and down with quite some volatility.

marvin

Th1984 wrote: »

Yer,

There is a substantial discount if you hold them for 5 years. I am leaning towards sale.

This leaves me a little confused as to what plan. If it is a sharesave then they are tax free from when you buy them and as soon as they are bought, usually at a discount to the rate 3 or 5 years ago, then you can sell immediately.

Lokolo

marvin wrote: »

This leaves me a little confused as to what plan. If it is a sharesave then they are tax free from when you buy them and as soon as they are bought, usually at a discount to the rate 3 or 5 years ago, then you can sell immediately.

My share scheme is a SIP.

You buy them tax-free but should you sell them before 5 years you are then taxed. Dividend shares are tax free for 3 years (again, if sold, I am taxed - not sure how this works with dividend shares).

So after a 5 year period I have batches coming through as tax free. I would have gained quite a lot because of matching shares + income tax/NI saved.