Sharesave query re capital gains / paying as little tax as possible

Olithepug

Thanks in advance for any advice

My sharescheme ends in August

I have invested £15,000

Original share price 50p so I will acquire 30,000 shares on 1st august

Share price presently around £3 so shares present value is £90,000 (£3 x 30,000 shares )

Ideally I would like to take as much out as possible

Can someone explain how much I can take out apart from £11k capital gains limit

I have a husband so I assume I can gift him shares also so he can use his £11k capital gain limit

Can I take out my £15k original investment?
Could I invest in a stock and shares isa? Would I be liable for capital gains on this?

xylophone

http://www.hmrc.gov.uk/isa/faqs.htm#19

"Q. Can I put shares from my employee share scheme into my ISA?
A. You can transfer any shares you get from:

an HMRC approved SAYE share option scheme run by your employer (that is, a savings related share option scheme)
a Share Incentive Plan
into a stocks and shares ISA without having to pay Capital Gains Tax - provided your ISA manager agrees to take them. The value of the shares at the date of transfer counts towards the annual limit.

This means you can transfer up to £15,000 worth of shares from 1 July 2014 (assuming that you make no other subscriptions to ISAs, in that tax year).

You must transfer the shares within 90 days from the day they cease to be subject to the Plan, or (for approved SAYE share option schemes) 90 days of the exercise of option date. Your employer should be able to tell you more."

Olithepug

xylophone wrote: »

"Q. Can I put shares from my employee share scheme into my ISA?
A. You can transfer any shares you get from:

an HMRC approved SAYE share option scheme run by your employer (that is, a savings related share option scheme)
a Share Incentive Plan
into a stocks and shares ISA without having to pay Capital Gains Tax - provided your ISA manager agrees to take them. The value of the shares at the date of transfer counts towards the annual limit.

This means you can transfer up to £15,000 worth of shares from 1 July 2014 (assuming that you make no other subscriptions to ISAs, in that tax year).

You must transfer the shares within 90 days from the day they cease to be subject to the Plan, or (for approved SAYE share option schemes) 90 days of the exercise of option date. Your employer should be able to tell you more."

Ah thank you so potentially I could transfer £15k of shares into a stocks and shares isa (I've not paid into an isa this year)
Cash them in and transfer to a cash isa and then withdraw the cash without any cgt liability?

Olithepug

Any advice on my £15k originally Invested?

Could this also be taken out straight away

p00hsticks

Olithepug wrote: »

Any advice on my £15k originally Invested?

Could this also be taken out straight away

I'm not an expert but I'm pretty sure the answer is 'no' - the £15,000 price you paid is apportioned across the whole amount of the shares at the time you sell them.

so - you invested £15k, it's now worth £90k - a potential capital gain of £75k.

The potential gain isn't realised until you actually sell them.
So for example, if you sell a third of them for £30k, then these cost you £5k so the capital gain on a third would be £30k - £5k.

p00hsticks

Olithepug wrote: »

Ah thank you so potentially I could transfer £15k of shares into a stocks and shares isa (I've not paid into an isa this year)
Cash them in and transfer to a cash isa and then withdraw the cash without any cgt liability?

Note that xylophones post contains the proviso '- provided your ISA manager agrees to take them'.

So it will depend on what company the scheme is with.

purdyoaten

p00hsticks wrote: »

I'm not an expert but I'm pretty sure the answer is 'no' - the £15,000 price you paid is apportioned across the whole amount of the shares at the time you sell them.

so - you invested £15k, it's now worth £90k - a potential capital gain of £75k.

The potential gain isn't realised until you actually sell them.
So for example, if you sell a third of them for £30k, then these cost you £5k so the capital gain on a third would be £30k - £5k.

I would agree with you. Additionally, many make the mistake in thinking that, because they transfer shares into an ISA, any gain is exempt which is, of course, completely incorrect. It is only the gain on any shares already within the ISA that is free of CGT.

Vortigern

Olithepug wrote: »

Can someone explain how much I can take out apart from £11k capital gains limit

I have a husband so I assume I can gift him shares also so he can use his £11k capital gain limit

Using your example figures of shares which cost you 50p now being worth £3, your gain is £2.50 per share. So you could sell 4400 shares (£11,000/2.50) to use your CGT allowance. You can give 4400 shares to your husband and he can sell immediately to use his CGT allowance. You should each receive £13,200 less any dealing costs.

You (but not your husband) can transfer 5000 shares (£15,000/£3.00) to a S&S ISA and sell immediately without incurring CGT liability.

The other 13,800 shares would need to be held until another financial year if you wish to avoid CGT.

Don't forget to revise these figures to use the actual share price when the shares are sold.

Vortigern

purdyoaten wrote: »

Additionally, many make the mistake in thinking that, because they transfer shares into an ISA, any gain is exempt which is, of course, completely incorrect. It is only the gain on any shares already within the ISA that is free of CGT.

You are referring here to shares which are transferred to an ISA using the "Bed & ISA" method. This could give rise to a taxable gain when the shares are sold outside the ISA before being bought inside the ISA.

However this does not apply when shares are transferred from an approved employee share scheme to an ISA within 90 days of the option being exercised - as described in xylophone's post above.

Vortigern

Olithepug wrote: »

Ah thank you so potentially I could transfer £15k of shares into a stocks and shares isa. Cash them in and transfer to a cash isa and then withdraw the cash without any cgt liability?

No need to use the cash ISA unless you intend to keep the cash in there at rather poor rates.

You could transfer shares to the S&S ISA (using the proper procedure) then sell the shares and withdraw the cash.

purdyoaten

Vortigern wrote: »

You are referring here to shares which are transferred to an ISA using the "Bed & ISA" method. This could give rise to a taxable gain when the shares are sold outside the ISA before being bought inside the ISA.

However this does not apply when shares are transferred from an approved employee share scheme to an ISA within 90 days of the option being exercised - as described in xylophone's post above.

Yes - I was aware of that. Unfortunately I was regarding poohstick's post in isolation with the end result that I helped to confuse the real issue at hand!