£70000 Sharesave

shug42

i have a sharesave through work which is worth £70000 and has matured is there anyway i can sell these shares taxfree i was looking to sell them all and buy a second house any advice would be welcome thanks

Perelandra

Three ways I know of:

1) The first £10,600 of gains is tax-free. So if you paid £10,000 for the shares:

Gain = 60,000
Proportion of shares that can be sold tax-free = 10,600 / 60,000 = approximately 1/6th.

1/6th of £70k = £11,666.

2) You can gift the same amount to a wife/husband/civil partner, who can then make use of her/his capital gains tax allowance in the same way.

3) If you received the shares in the last 90 days, you can transfer these directly to a S&S ISA, then sell them and withdraw your money. The limit for this year is £11,560, less any contributions you've already made to ISAs (S&S or Cash).

That would take care of about half the amount. If you can wait until next April, you could then do the same with the rest with your new allowances EDIT (except for the ISA bit) , although that will, of course, involve time delay and risk.

Edit above. Chris_m below explains how to maximise the ISA side better than I do.

chris_m

Have you exercised the option yet, and have you done anything else which would give a capital gains tax liability in this financial year? Also, have you used an ISA at all this year?

If not to all three, then (provided your scheme allows you defer exercising the option for up to six months) you could get a bit over 40K gain of it tax free with just a little bit of planning and effort.

Assuming that you can, you need to wait until mid-late January before exercising the option.
Then, you arrange for an ISA's-worth to be transferred into a Stocks & shares ISA immediately. These may be sold whenever you like
Then you dispose of (sell) just enough of the remaining shares such that your capital gain is below the threshold, before April.
In April, within 90 days for exercising the option, you arrange for a further ISA's-worth to be transferred into the ISA. Again, you can sell them when you like.
Finally, you sell a further tranche from the remainder so that the gain is less than the CGT allowance.
If any are left you will have to either accept a tax liability or wait a further year (or two) before selling.

One additonal option - if you are married, you can transfer some to your spouse, thereby taking advantage of their CGT allowance as well.

chris_m

Perelandra wrote: »

If you can wait until next April, you could then do the same with the rest with your new allowances, although that will, of course, involve time delay and risk.

But they can't use the 2014/15 ISA option in April if they've already got the shares - it'd be beyond the 90 days allowed for a transfer without a disposal.

Perelandra

chris_m wrote: »

But they can't use the 2014/15 ISA option in April if they've already got the shares - it'd be beyond the 90 days allowed for a transfer without a disposal.

Um. You are of course correct.

chris_m

Perelandra wrote: »

Um. You are of course correct.

Hehe, I know I am - I've got a potential biggie coming out next year so I've researched and planned my moves thoroughly

To be fair, your post hinted at it and anyone who has some knowledge or experience of this would have realised - but I suspect the OP doesn't come into that category so I felt that a clarification would be useful for them.

Perelandra

Aye, and I was aware of it when I was considering the response, but forgot to mention it when actually posting.

Perils of early-morning forum'ing!