Sharesave has matured: What should I do now?

aspley

I have been putting money into my company's Sharesave for the last 3 years and it matured on 1st August 2015. I leave the company on Thursday 13th August to return to University to study full-time and will have no earnings over the next 12 months.

The investment was for £9,000 and this is now worth, on today's shareprice, in excess of £23,000. I don't need to cash the shares in for another year at least.

Should my wife and I take out ISAs so we can put the shares in these. I understand this means I won't pay Capital Gains Tax if we keep them in there for a year. Is that correct? My wife is a Higher Rate income tax payer - I don't know if this is relevant.

Can anyone advise what the best course of action might be so as to not lose any monies unnecessarily please?

Thanks,
Aspley.

Gadfium

Check with your Sharesave team, as you can normally transfer the shares directly into an ISA without incurring any CGT. You cannot do it by opening an ISA yourself and then transferring them in- it has to be done with a form from the Sharesave trustee.

You can also split the SS over two tax years, if you defer exercising the option to buy. The transfer into an ISA has to be done within 90 days of the option to buy, so if you delay your option until after Christmas you can then transfer this years ISA limit (assuming you haven't already used this) in then, and the remainder in tax year 16/17.

atush

Not sure he can defer once he has left the company.

And it could be worth selling the shares over 15K. And putting into an ISA for the wife but in different shares/funds. As you now have a large wad of money in one asset you cannot sell for a year?

Gadfium

atush wrote: »

Not sure he can defer once he has left the company.

Good point.

The other thing to consider is that the CGT is only payable on the gain. The gain in this case is £14K minus the CGT allowance of £11.1K. If he sold within the CT allowance and then transferred the remainder to his wife, she could then sell them free of CGT (as the remainder would be under her allowance).

Doing this would remove the risk of having a chunk of cash tied up in a single share.

aspley

Is it worth selling as the shares are still going up in price and have been for the last three years? They've gone from £4.50 a share to £11.30+ I know there's a risk of them going down in value.

If the shares are in share ISA's I assumed I could keep them all. £15,000 worth in my name and £8,000 in my wife's. I read that gifts to a spouse are exempt of CGT.

I'm really clueless on this so apologies if I'm asking daft questions. Maybe I should google 'Sharesaves for Dummies'!

Gadfium

aspley wrote: »

Is it worth selling as the shares are still going up in price and have been for the last three years? They've gone from £4.50 a share to £11.30+ I know there's a risk of them going down in value.

Well, only you can answer that, to be honest. It depends on your attitude to risk and other savings/investments. if it was me, and the £23k was my only savings, then I'd feel very nervous in holding a single stock. On the other hand, if I held lots of other investments/savings, then I might feel a lot more adventurous and be happy to continue with the growth. Don't forget that you will probably receive dividends too!

aspley wrote: »

If the shares are in share ISA's I assumed I could keep them all. £15,000 worth in my name and £8,000 in my wife's. I read that gifts to a spouse are exempt of CGT.

I'm really clueless on this so apologies if I'm asking daft questions. Maybe I should google 'Sharesaves for Dummies'!

You can gift the shares to your wife, yes. CGT would still apply on the sale if the gain in the tax year exceeded the allowance. She will have her own CGT allowance as well as you. Given the amounts talked about, you could gift he some and jointly sell the lot CGT free.

You could also bed-and-ISA the shares. you would pay any CGT applicable during this, but then any future growth would be protected from taxation.

aspley wrote: »

I'm really clueless on this so apologies if I'm asking daft questions. Maybe I should google 'Sharesaves for Dummies'!

Does your employer not have a helpdesk or information on their Intranet?

jimjames

aspley wrote: »

Is it worth selling as the shares are still going up in price and have been for the last three years? They've gone from £4.50 a share to £11.30+ I know there's a risk of them going down in value.

If the shares are in share ISA's I assumed I could keep them all. £15,000 worth in my name and £8,000 in my wife's. I read that gifts to a spouse are exempt of CGT.

I'm really clueless on this so apologies if I'm asking daft questions. Maybe I should google 'Sharesaves for Dummies'!

Some people with RBS and Halifax thought that holding large chunks of their shares from sharesave schemes was a good idea as the price was going up. Until the price stopped going up and crashed.


Are these BT shares? Companies can get re-rated but stellar growth rarely continues indefinitely

Gadfium

jimjames wrote: »

Are these BT shares?

Not at £11:30 they're not

martinsurrey

As stated above, all your shares in one place is asking for trouble (ask Woolworths share holders)...

Gift half to your wife and sell the lot (zero CGT), then ISA the cash, quick, simple, tax efficient.

redpete

Your question (should I keep the shares and if so where) isn't really related to the Sharesave scheme apart from any easy way the scheme might offer to put them into an ISA.

The answer really depends on how comfortable you are with losing some of the value from now on - you do suggest that you will need some of the value as cash in a year's time.

It is worth considering selling some of the shares and putting the cash into a high interest bank account or a cash ISA to cover what you might need over the next 2-3 years and putting the rest into a S&S ISA.

aspley

Gadfium wrote: »

Not at £11:30 they're not

The shares are in a massive multinational publishing house that's worth several £bn. I know there's a risk but this isn't our only savings; we have cash savings but no shares. I've been looking at the company's share price history and it has continued to rise over the last 7 years with minor fluctuations.

I'll find out about the Helpdesk and see what they say I can do. I guess I also need to see what high interest accounts are available. We've used up our Santander 123 allowances. I'm not the best at knowing what to do with finances, as you can see.

Thank you everyone for your advice to date!