Royal Mail Shares: Nominee account vs Share Certificate

ssg0987

Quick question for any financial Savvy people on here.

So I have purchased shares through the Royal Mail website completely disregarding any stock brokers. Deadline of course is closed. There is an option to receive share certificate or Royal Mail nominee account.


1) What would be the best option to choose out of the above options?
2) If I planned on holding for the short term what would be the best efficient way to hold them? Move to a nominee account with a stockbroker?
3) If I planned on holding for the long term what would be the best efficient way to hold them? Tax free ISA, potentially incurring fees VS Share certificate?

I read a couple of points which are both for and against holding in an ISA.....Thoughts anyone? Thanks

"If you buy the shares through a broker and later put them into an Isa or Sipp, the shares are sold and instantly repurchased inside the tax-efficient wrapper, which would incur a £11.95 fee with Hargreaves Lansdown, plus stamp duty."

"No commission is charged for putting the shares into an Isa or Sipp at launch, however brokers will make an annual charge to hold them. Hargreaves Lansdown, for example, charges 0.5 per cent."

"Of course outside an ISA, 10% income tax will be automatically deducted from dividends, and there will be CGT on any gain over the current exempt amount of £10,900. So she would have to pay CGT when she sells only if the profit is over £10,900, and it will be 18% on the profit over that amount (or 28% if she pays higher rate income tax). So it's up to her whether it is worth paying the admin fees for an ISA in order to save that. On 10k of shares, obviously they would have to double in value to pay any CGT at all, and the fees might be more than the income tax saved on dividends. In which case it might be cheaper NOT to have an ISA."

Quentin

1) You already made a choice when you applied!

ssg0987

Just got off the phone to them. Your right yes I did, I ticked share certificate option, must have been completely asleep! If hadn't ticked anything it would have been a nominee account through equiniti. Wrong choice made? Worth rectifying? Thanks

ChopperST

It depends on what you want to do.

If you want an instant sell then you'll have to wait till you receive your certificate before you can.

If you are holding for the long term then it doesn't really matter too much. Obviously holding paper shares mean that you have to look after them and not loose them as there will be a charge to do so.

Quentin

ssg0987 wrote: »

Wrong choice made? Worth rectifying? Thanks

Too late to rectify.

You will get a cert in the post after October 15th.

Maybe use a broker next time you buy shares??

Reaper

I think you made several wrong choices there. Going direct and worse opting for a share certificate means you are headed for maximum charges when you want to sell.

You could consider giving your share certificate to a broker and converting to a nominee account. That may be a cheaper way to sell. ISAs will likely cost you extra so depends on whether you are a higher rate tax payer or use up your capital gains allowance. If not it's not really worth it.

There are various cheap brokers around. I use XO because they were the cheapest when I was looking, though there are even cheaper ones now.

ssg0987

Thanks for your responses.

1) Undecided whether to hold for the long term or short term. I think I'm leaning towards longer term despite there being an initial jump in price, I expect a lul and then over long term its bound to rise (although I'm no trader!)

2) As a RM employee I could only go direct through applying for either share certificate or nominee account with equiniti. Just telephoned equiniti who said they will transfer free of charge (takes 3-5 working days) to a nominee account. However once with them £10 transfer charge to transfer to anyone else if I chose to which means if I had gone with a nominee account and wanted to transfer still incurring charges. Surely given their 1% charge on selling I made (by fluke) the right choice as now I have the choice over which broker I choose without the £10 charge? Unless there any further tax implications (I'm not a high rate payer).

I guess the disadvantage is that if I wanted to sell in the short term I have to wait a few days for things to change over and of course I have to look after the paper copies.

Am I missing anything guys?

ChopperST

ssg0987 wrote: »

As a RM employee

Am I missing anything guys?

Yes you can't sell anyway.

ssg0987

hmmmm....why wouldn't I be able to sell?

Quentin

You could only buy via the gov. site, and aren't allowed to sell till Tuesday.

ChopperST

My understanding was RM staff cannot sell for the next 5 years?

http://www.lbc.co.uk/royal-mail-shares-soar-in-first-trades-79506