Cashing in a share scheme and capital gains tax?

James-F

This is over a year away, but I'm trying to be good and plan ahead. Basically I have a share scheme through my work that will mature in 2014, and should yield around 27k worth of shares, based on today's share price. I've been reading up on capital gains tax and I wanted to check if my understanding is correct.

At the current rate, if I sell more than £10,600 worth of shares, I will pay 28% capital gains tax on the overage (So roughly £4.5k if I sell them all). If I sell up to the capital gains limit, each year, but no more, then I won't be required to pay any tax, but it will take up to 3 years to sell all the shares - assuming I don't have any other capital gains coming in?

Is that correct, or is there more to this that I haven't understood? And if thats correct, can I sell £10,600 worth in March/April, and then another £10,600 in May/June when the financial year rolls over, or have I also miss-understood that?

CLAPTON

what sort of share scehme?

James-F

Contribute monthly over 5 years, at the end of scheme have option to purchase shares at the rate set at start of the scheme.

fergual2

Hi James - yes you are right 10,600 capital gains per annum allowable without CGT being payable per tax year. But remember to deduct your contributed value for the shares you are selling as it is only the profit (capital gains) that would be counted up to the limit of 10,600. So as example you bought a number of shares for £3000 now selling for £13,600 capital gains is 13,600-3000 = 10,600 so no tax to pay.

jonesMUFCforever

Don't forget to utilise your ISA allowances. Normally for these schemes you have 90 days to put them in from date you get shares.

marco_79

My understanding is that you only pay tax on the gain, therefore you need to subtract your contributions over the 5 years from the total sale of the shares.

Another option is to gift shares to a partner and utilise there capital gains allowance also.

jonnyb

I was looking to start my own thread, but it's similar to this one. I have 2 daft questions, considering that I am pretty good with finances :
1. re putting the shares into an isa, that would not be all the shares would it, just up to the annual isa allowance ?
2. assuming we don't fess up to HMRC about a capital gain, how do they get notified about it ? do our share platforms notify them - I use selftrade.

thanks in advance for any advice.