Selling shares through Power of Attorney

Galad100

Hi

I have joint power of attorney with my sister over my Mother's affairs. She is in full time residential care which we are paying for out of her savings and investments. At some point later this year we are going to have to start selling her shares (in lots to mitigate her having to pay tax) to continue paying for her care.

My question is how do we go about selling the shares and what is the most efficient way to cash them in to avoid tax. My Mother has a widow's pension and also receives Attendance Allowance. The shares are all held in one company and are worth just under £19,000 at current prices.

Thanks

Biggles

Galad100 wrote: »

My question is how do we go about selling the shares and what is the most efficient way to cash them in to avoid tax. My Mother has a widow's pension and also receives Attendance Allowance. The shares are all held in one company and are worth just under £19,000 at current prices.

What the shares are worth is irrelevant when it comes to tax. What matters is, how much of the £19,000 would be a capital gain? That is, how much did the shares cost?

Galad100

The shares were bought in the 1960s. I'll need to get the share certificates from the solicitors. to find out how much my Mother paid for them.

quotememiserable

The certificates won't tell you what was paid. Since they were bought so long ago, the value will be nearly all gain but you can feed it into tax years by sellling some this year and some next. Open up an account in your mum's name then you'll need to send the a PA document and after that you can place trades. http://www.tddirectinvesting.co.uk/ have done this with me in the past.

talexuser

Yes, you need to search the net for the £ cost of these shares on the day they were bought or acquired, and subtract that value from what they are worth today. If it is more than £11000 then you are liable for capital gains tax if you sell them all.

As mentioned above if they have been held for so long the value could be above this gain limit.

If that is the case sell only £11000 worth now and sell the rest after April 6th next year, this will avoid any CTG calls.

The cheapest way to sell is online through a broker like xo, which only charge around £6 a trade. You need to send the certificates to them registered post after opening an account and get them converted to electronic form in the crest system. Then selling is as easy as a mouse click on the day you choose the price is high.

Selling through your bank is generally the most expensive way, maybe costing £40-60 or more for a large trade.

You obviously have the additional step of proving the POA with whoever you deal with.

Laycity

You'll need to send your original registered POA, or a certified copy, to the share registrars. Also if you do send your share certificate to an online broker they will also need to see your POA.

G_M

Well worth getting 3 or 4 'Certified Copies' of the POA. A solicitor charges around £20 to certify, but if you have a friendly bank manager or financial adviser they may do it for free.

Then send the copy to whoever you sell through and keep the original safe.

I imagine youll need to do the same with her bank, with HMRC and who know who else, so a few copies are useful.

You cannot just photocopy - you have to get a professional to 'certify' that they've seen the original.

grey_gym_sock

in fact, if the shares were acquired before 31 march 1982, then the base value to use is what they were worth on 31 march 1982, not what was paid for them.

however, this makes little practical difference - spreading the sales over 2 tax years is still a good approach.