Tax on gifted shares

Jose

In 1992 my mother (now deceased) gifted me shares valued at £14,000. I would like to sell them in order to buy a home. Currently, they are worth £84,000. I pay the lower rate of PAYE tax.

1) If I sell in the current financial year, what is the capital gains tax likely to be?

2) If I sell after April 5 2008, would this benefit or penalise me? ( Assuming!!?? the share market stays relatively stable)

3) 60% (value) of these are registered with Computershare and Shareview. Would it be possible and/or advantageous to transfer them to someone like Hoodless Brennan for sale?

I am looking forward to some helpful advice, thanks!

CLAPTON

a. if sold this year then it works like this

acqusiition value = 14,000
but you can add indexation relief ... it depend which month you acquired them but assuming worst case of dec 1992 then you can add 16.8% giving

cost = 16,352

selling price net of selling charges 84,000
so gain is 67,648
but you have 9 years of taper relief reduces it to 65%
so gain is 43,971
personal CGT allowance is 9,200
so you are taxed on 34,771
actual tax is 20% or 40% depending upon your salary.
so something between 6,954 and £13,908

If married you can transfer half the shares to your OH and so use their 9,200 allowance.

b. sell next year

gain is 84000 - 14000 = 70,000
less CGT allowance 9,200 = 60800
all taxed at 18%
so tax = 10,944
again you can use your spouse's allowance if applicable


I would suggest you check my arithmetic

I see no CGT difference is changing broker

Murdina

just to add to the above, if you are willing to take the risk of their price varying, you could sell some now, give some to spouse and sell now and then sell the rest next year - leaving aside the impending CGT changes that way you would use this year and next year's CGT allowances.

Jose

Thanks such a lot Clapton and Murdina, that's very helpful. My question 3) was supposed to ask for advice on transfering shares to Hoodless Brennan because of their cheaper selling commission. Would it be worth the hassle? Would Computershare/Shareview charge me a fee for transferring out? Thanks for any advice. I am new to this!

barak

Jose wrote: »

Would Computershare/Shareview charge me a fee for transferring out?

You may be confused about Computershare and Shareview.

Computershare act as registrars for certain companies and you can't change that. Shareview is a portfolio service run by Equiniti [formerly Lloyds TSB Registrars] who similarly act as registrars for certain other companies. The registrars keep the shareholders register, so the shares will still be registered with them after you sell them - but in somebody else's name.

Both these registrars have share dealing services which are very convenient if you have certificates as you can immediately sell your shares online - but they are not the cheapest. You can use any broker/bank to sell your shares. Some brokers may require you to transfer the shares into their nominee account before selling them - hopefully without any additional charge.

Somebody else will no doubt post advice on the cheapest brokers.