CGT and company share save scheme

grim77

Hi everyone - I'm due to make a gain of approx £40k from a company share save scheme in 2014 and would like to know the most tax efficient way to use the gain to pay off some of my mortgage.

My thoughts on this so far:
1. transfer £10.6k worth of shares to my wife and she then sells the shares with no CGT
2. I sell £10.6k of shares in my own name to use up my CGT
3. I transfer £11,520 of shares into an ISA with the same company that manages the share save scheme so as to avoid any CGT
4. transfer the remaining shares into my wife's name and she then transfers to an ISA to avoid CGT.
5. we then take money out of the ISA's and with the gain from our share we sold we pay into our mortgage to reduce out debt.

I'd really appreciate views on whether this is the best way to take the money out of our share save scheme.

Many thanks in advance.

zygurat789

grim77 wrote: »

Hi everyone - I'm due to make a gain of approx £40k from a company share save scheme in 2014 and would like to know the most tax efficient way to use the gain to pay off some of my mortgage.

My thoughts on this so far:
1. transfer £10.6k worth of shares to my wife and she then sells the shares with no CGT
2. I sell £10.6k of shares in my own name to use up my CGT
3. I transfer £11,520 of shares into an ISA with the same company that manages the share save scheme so as to avoid any CGT
4. transfer the remaining shares into my wife's name and she then transfers to an ISA to avoid CGT.
5. we then take money out of the ISA's and with the gain from our share we sold we pay into our mortgage to reduce out debt.

I'd really appreciate views on whether this is the best way to take the money out of our share save scheme.

Many thanks in advance.

First of all is that date in 2014 fixed and, if so, what is it.
Second , isn't your £10.6k now £10.9k? Every little helps
Third, apart from your mortgage, do you any other amounts like credit cards, hp, bank loans etc.

grim77

Hi thanks for your response -

1. yes, i can buy my shares from a date in Aug next year (don't have the date to hand) at a pre-determined price and i expect to make a gain of approx £40k tax free. if i sell them in one go i'll be liable to pay CGT which i'd like to avoid.

2. oops, and yes that's £10.9k CGT not £10.6k.

3. no other loans, CC etc

zygurat789

So you could sell half in 2013/14 and half again in 2014/15. This would allow £21,800 exempt amount in 2013/14 and (projected by HM Treasury) £22,200 exempt amount in 2014/15. £44,000 in total and no need for the additional step which may or may not save something.
Now you have £40K+ take it to the Savings and Investment doard and see what they have to say.

grim77

thanks - I'd like to sell all the shares as soon as possible from Aug 2014 because I'm concerned that if i leave half the shares in the scheme for another year, they could drop in value
PLUS I'd like to pay all of the gain into my mortgage as early as possible. So to achieve this my question is...assuming i can sell approx £22k worth of gain in 14/15, can i transfer the remaining amount into an ISA without being hit by CGT? If so, can I then withdraw the cash from the ISA straight away and deposit into my mortgage with no CGT?