Sharesave maturing and CGT

dodger1

Am I correct in thinking you can transfer shares into a stocks and shares isa within 90 days of the sharesave scheme maturing and then sell them immediately without any tax liability. I note the new limit from July for S&S isas is £15,000.

Eg.

Maturity total £100,000 CGT allowance £11,000

Transfer £11,000 of shares to spouse and spouse sells with no tax

I sell £11,000 of shares with no tax

I transfer £15,000 of shares to S&S isa and sell immediately, no tax

So basically I can get around £37,000 in the first year without any tax liability, is that correct? Thanks for any help.

ermine

Yes, you are correct. You have to establish ahead of time with your ISA provider that they specifically do accept this type of transfer and what form to use with it - I recall there was a particular form I had to get from the SS trustee on exercising the option and use one specific to my ISA provider. But the process may vary from ISA provider to another.

Note CGT is on the capital gain which is the difference between the option price that you paid and what you sell them for. So you can sell a bit more than the CGT allowance, as part of the proceeds of sale are the return of your capital, not the return on your capital.

gadgetmind

The form is just a letter from the Company Secretary stating that they are approved options and giving the exercise date.

As Ermine says, you need to work out the actual gain. For example, if you were putting in £250pcm for three years, £9k of that £100k total is return of capital rather than gain.

Keep records of everything!

dodger1

ermine wrote: »

Yes, you are correct. You have to establish ahead of time with your ISA provider that they specifically do accept this type of transfer and what form to use with it -

What if you don't already have a S&S isa but just a cash isa?

gadgetmind

I've done this manoeuvre a few times using Hargreaves Lansdown.

Open "Fund and Share" accounts for self + spouse.
Open S&S ISA account for yourself.
Send them share certificate to deposit into your F&S account.
Also send copy of letter from company secretary.
Also sent letter asking them to move a full S&S allowance from your F&S to your ISA.
Tell them you want to irrevocably gift whatever represents a CGT allowance of shares to your spouse's F&S account. (This will be more than CGT allowance in value.)
You can then sell whatever you want online.

You can probably do the whole lot in one postal drop but will need to complete their crest certificate and send it back.

Vortigern

dodger1 wrote: »

What if you don't already have a S&S isa but just a cash isa?

Your cash ISA is no use to you for avoiding CGT. In fact if you have paid in to a cash ISA this tax year, this will reduce the amount you can pay into a S&S ISA.

Follow gadgetmind's instructions closely.

dodger1

Thanks for the info.