B or C Share options for Tax?

72clg

I know everyone is different and I intend on seeking advice of a FA, but I just would like to hear other people’s views who might have been though the same thing?

I’m a higher tax earner, earning about 50k a year and receiving child benefit for 2 children, and I have about 21k in shares, but about 20k of these have not been held for the 3-5 year period so are taxable.

Half the shares are to be sold/receive a cash paying and I have some options. I’d like a payout to pay off some bills, but what is the best tax option? I’m given an option to transfer these into B or C shares. Sell the shares on and pay income tax and NI? Or sell the shares and pay capital gains? I’ve already sold about £4500 worth of shares this year but they were exempt from tax as I’d held them for the required period.

Dead_keen

I guess your question hasn't been answered because you have not given enough information for most people to understand your question. Talking about B and C shares without any context is not helpful as there are very few B/C schemes out there.

To be honest, I doubt if you would get a sensible answer from anyone on here who has not read the employee comms material you have been sent.

I assume you are talking about Vodafone and that most of the shares are held under an approved share incentive plan. Page 85 of the circular gives you some more information on the tax treatment but you will have been sent some extra info on the SIP that's not publicly available.

I have no idea what the employee comms say but I'd assume that you'd be paying PAYE/NIC on the SIP shares that have not been held for 5+ years and so there would be no further CGT if you sold B shares but there would be the potential for some double income tax if you sold C shares. You would appear to risk losing some child benefit too, but that depends on other things like your pension contributions, gifts to charities and your actual numbers.

Good luck.