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Getting the most out of an employee share scheme

I'm hoping someone out there can help me as my brain is well and truly hurting! My husband has been part of an employee share scheme that is set to mature soon and we are trying to figure out how to get the best out of the investment. There are various options available, from selling immediately either all of the shares or some of them, or transferring to an ISA, or transferring to a spouse (ie, me!) Or doing a combination of the above. I think I understand what we should do, but I'm worried that I have the wrong end of the stick. Perhaps a generous-spirited soul out there could give me the benefit of their wisdom!
The total return on his investment is going to be about £30,000. I believe that the total CGT-free allowance is £11,000. So our thinking is that he transfers £11,000 to his own ISA, and £11,000 into my ISA (by way of transfer to a spouse), and then leaves the rest where it is until the next financial year, when he transfers again to either his or my ISA.
If I am correct on the above, then I've got the following questions:
1) my ISA - I currently have a Stocks and Share ISA which I don't think I can use to house this money, as its set up to buy a certain portfolio of stocks and shares. I have a Cash ISA that I have not paid into, this financial year. Therefore, can we put £11,000 into this Cash ISA (provided that this - plus the amount I pay into my Stocks and Share ISA this year - is within my ISA allowance), or do I need to open a new ISA. And if that's the case, does the existence of my current Stocks and Share ISA allow me to open the required new ISA or does the existence of that cause us problems?
2) If we leave some shares where they are and transfer them over next financial year, will our CGT-free allowance start again/be renewed for the year?
3) Once the money (however much) is in an ISA (or two), can we transfer it out (ie, cash it in) whenever we like, tax-free?

I hope that the above makes sense and is less confusing to someone out there than it is to me! Advice ideas would be gratefully appreciated.

Thanks in advance!

Comments

  • sprouty76
    sprouty76 Posts: 20 Forumite
    Part of the Furniture 10 Posts Combo Breaker
    edited 23 June 2014 at 3:37PM
    I don't think you can transfer to somebody else's ISA directly from a sharesave scheme. You also only have a short period of time (90 days, I think) to transfer into an ISA, so leaving some where it is and then transferring into an ISA isn't an option.

    On the other hand, the ISA limit is going up to £15,000 in a week or two. You haven't said what the value of the scheme is at the moment (unless, that's what you meant by the £30,000 - in which case you shouldn't have too much trouble), so it's hard to say if 1 * ISA allowance + 2 * GCT allowances will be sufficient.

    You're right that you both get a new GCT allowance in the next tax year.
  • Thanks for the reply! It says in our documents that we can transfer some or all to an EasyShare account and then it could be transferred from there free within 90 days into an ISA, and that we could also transfer some or all to a spouse if they opened up an EasyShare account and then from the spouse could "repurchase them into an ISA".
    So my theory was based on doing these 2 things. - transferrring it all to an Easyshare account, then transferring £11K to my husbands ISA and £11K to mine.
    But it depends on whether my current ISA set-up allows us to benefit from the "transfer-to-spouse" option. And also on whether we could leave the remaining money (outside of the ISA allowance for both my husband and myself) with the EasyShare account until next financial year in order to benefit from a new CGT/ISA allowance.
    I think I'm confusing myself more every minute!
  • CLAPTON
    CLAPTON Posts: 41,865 Forumite
    10,000 Posts Combo Breaker
    Becs0206 wrote: »
    Thanks for the reply! It says in our documents that we can transfer some or all to an EasyShare account and then it could be transferred from there free within 90 days into an ISA, and that we could also transfer some or all to a spouse if they opened up an EasyShare account and then from the spouse could "repurchase them into an ISA".
    So my theory was based on doing these 2 things. - transferrring it all to an Easyshare account, then transferring £11K to my husbands ISA and £11K to mine.
    But it depends on whether my current ISA set-up allows us to benefit from the "transfer-to-spouse" option. And also on whether we could leave the remaining money (outside of the ISA allowance for both my husband and myself) with the EasyShare account until next financial year in order to benefit from a new CGT/ISA allowance.
    I think I'm confusing myself more every minute!


    -what is the 30,000 ? is that the total value of the shares or is that the PROFIT?


    -the value of the transfer to ISA option for your OH is that he has two bites of the tax free cherry - transfer to ISA direct plus he still has 11,000 cgt allowance

    -if he gives you some of the shares then you can sell/transfer 11,000 where ever you like tax free but there no tax advance at the time to put them in an ISA in the way your OH benefits (an ISA maybe be good long term for the usual reasons)
  • innovate
    innovate Posts: 16,217 Forumite
    10,000 Posts Combo Breaker
    edited 23 June 2014 at 5:01PM
    We need more info
    1. how much is the profit of the share scheme? i.e. how much did your husband pay into it, and how much is it worth now?
    2. what is this S&S ISA of yours, and how much have you paid into it since April 6 2014? If you are committed to pay any more into it, how much is it and when?
    3. what if any ISA does your husband have, and how much has he paid into it since April 6 2014? Has he got any existing commitments to pay more into it, if so, how much and when?
    4. why do you suggest £11K into an ISA if the allowance is £15K?
    5. how long before you plan to spend the money?
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    The direct transfer to an ISA is only for your husband. You'll be able to do this with £15k worth of shares (£15k / share price on day = number of shares) and dispose of them in the ISA without CGT.

    You can then both sell up to £11k of gain of shares without paying CGT. To work out the number of shares you need to do £11k / (share price when sold - share option price).

    At others say, putting anything into an ISA for yourself is an unrelated transaction, and any ISA subscription your husband has done since 2014-04-06 will reduce that £15k.

    Note the £15k doesn't come in until the start of July in just over a week.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • gadgetmind
    gadgetmind Posts: 11,130 Forumite
    Part of the Furniture 10,000 Posts Combo Breaker
    Maybe you can get things straight by regarding this as five different transactions.

    1) Your husband moves £15k of value of shares into his ISA. (Reduced if he's put anything into an ISA this tax year.) This doesn't generate any capital gain.
    2) Your husband (optionally) sells the shares in his ISA. This doesn't generate any capital gain.
    3) Your husband transfers some shares to you, typically enough to make a gain of around £11k, but it's hard to get this exact. This doesn't generate any capital gain.
    4) When you get the shares, you sell them. This *does* generate a capital gain.
    5) Your husband sells whatever shares he has left. This *does* generate a capital gain.

    It's worth "going under" rather than over as you can sell whatever dribs and drabs are left over next year.
    I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.

    Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.
  • Thanks so much to all of your for your replies. Really kind.

    Clapton, to answer your question, the £30K is the rough profit, may be more but I am being conservative. I had assumed that the original investment would not be liable to tax (but do let me know if I'm not wrong!)
  • Hi Innovate.
    Thanks so much for the response. i'll try and answer some of your questions:

    - how much is the profit of the share scheme? i.e. how much did your husband pay into it, and how much is it worth now? He paid £7200 into it, it probably worth in total about £42-45K depending on share price when it matures, so a profit of between £35 and £38K
    what is this S&S ISA of yours, and how much have you paid into it since April 6 2014? If you are committed to pay any more into it, how much is it and when? My S&S ISA is an M&G account, I pay £200 a month into it so that £600 since April (although there's about £10K in it)
    what if any ISA does your husband have, and how much has he paid into it since April 6 2014? Has he got any existing commitments to pay more into it, if so, how much and when? He has about £5K in an ISA but hasn't paid anything in to it since April and has no commitments or intentions to do so.
    why do you suggest £11K into an ISA if the allowance is £15K? Just read that £11K could be transferred into ISA or spouse but may be totally confused! that info may be out of date.
    how long before you plan to spend the money? We don't want to spend much of it immediately, most of it we want to save for the future, but might need access to £5-10K of it, in next few months.
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