Capital Gains Tax on SAYE

keeley1973

Hi. I have a five year SAYE maturing in October and i need to make a decision this month on whether to take the cash or the shares. It is almost certain i will take the shares due to the low option price but i have just been advised that because of the amount of profit i will make, i cannot sell and take it all in this tax year without becoming liable for tax. Any thoughts please? I have paid in 15k and i expect the final sale price to be around 33k. I work for an American company so the trade will be done in the US with the proceeds transferred to me by BACS or cheque (my choice). I am not a higher rate tax payer on my salary but if i added the profit for these shares to the year, this would push me up there. I have a self employed husband who i could transfer some shares to if necessary (although dont really want to). Any advice greatly appreciated. Thanks!

Your_Hero

If you are looking to sell the shares immediately, then probably the better option is to make use of your CGT allowance of £11,000. This is the tax-free amount on the gain you've made, not the total sale proceeds so you will need to work out what your gain is. You can then transfer some into your husband's name to make use of his CGT allowance.

Alternatively, should you wish to keep the shares, you could transfer them into an ISA or pension within 90 days of purchase.

http://www.which.co.uk/money/tax/guides/capital-gains-tax-explained/capital-gains-tax-on-shares/

Archi_Bald

As it's US shares, there is very likely some US tax to pay as well when you sell them. Your company should be able to advise details.

There should be no impact on your income tax if you sell shares.

olbas_oil

I would certainly ask the company whether you are liable for US withholding tax. If this were a UK broker selling US shares, you would be required to complete a w8Ben form. Otherwise you would face a savage tax bill, with the horrendous task of registering and making a return to the IRS to try and get it back.

redped

Various options are explained here - http://moneytothemasses.com/tax-advice/tax-mitigation-tax-advice/how-to-avoid-paying-tax-on-your-save-as-you-earn-saye-shares

keeley1973

Thank you all. Yes i already have a W8BEN on file. I am just wondering how the UK authorities would know about the income if it was not declared though. Whether i am supposed to do this via a tax return (as i never have before) or whether the US authorities do this. Frankly every single conversation i gave heard about the tax office so far is they dont know whats going on and you get different answers every time!

Your_Hero

keeley1973 wrote: »

Thank you all. Yes i already have a W8BEN on file. I am just wondering how the UK authorities would know about the income if it was not declared though. Whether i am supposed to do this via a tax return (as i never have before) or whether the US authorities do this. Frankly every single conversation i gave heard about the tax office so far is they dont know whats going on and you get different answers every time!

Normally this is declared through your tax returns. Declaring any tax owed is your responsibility, not for the HMRC to find out for themselves.