Wire Transfer from ETrade (US) to UK, can someone help please?

transferwiser

Found this thread via a Google search and just wanted to thank y'all.

I can confirm that using the 'Wire Transfer Number' instead of the 'Routing Number (ACH or ABA)' works perfectly. I called Etrade to confirm everything was set up correctly and within 24 hours, the money appeared in my TransferWise USD account. I wasn't even charged a $25 fee by Etrade.

The TransferWise email notification read "[My Name as on Etrade] just paid you".

littlerobbob

this thread has been super useful

Since many of you seem to have ESPP shares that now reside in an Etrade account does anyone have a forumla for working out what capital gains you should pay when you sell? I know I was taxed at source on the full value of the share puchase price (versus the discount share price i paid i.e. -25% for espp) but am a little unsure on how this affects my CGT when i go to sell. Has anyone had any experience or advice on this please? thanks in advance

coyrls

littlerobbob wrote: »

this thread has been super useful

Since many of you seem to have ESPP shares that now reside in an Etrade account does anyone have a forumla for working out what capital gains you should pay when you sell? I know I was taxed at source on the full value of the share puchase price (versus the discount share price i paid i.e. -25% for espp) but am a little unsure on how this affects my CGT when i go to sell. Has anyone had any experience or advice on this please? thanks in advance

[FONT=&quot]It’s a long time since I dealt with this but I’m pretty that the capital gain is calculated based on the sale price minus the share purchase price (not the discounted price). You will have paid income tax on the 25% discount when you purchased the shares. The logic is that as the discount is treated as income, you can’t also be liable for capital gains tax on the same sum.[/FONT]

littlerobbob

Do you know how it works with RSUs then? They are just “gifted” aren’t they so I’m a little lost as to how they get counted at sale time. Thanks for your help

coyrls

littlerobbob wrote: »

Do you know how it works with RSUs then? They are just “gifted” aren’t they so I’m a little lost as to how they get counted at sale time. Thanks for your help

No I don't, I had to look up what an RSU was! I've only dealt with US stock options and ESPP and that was in the 1990s!

EdSwippet

littlerobbob wrote: »

Do you know how it works with RSUs then? They are just “gifted” aren’t they so I’m a little lost as to how they get counted at sale time. Thanks for your help

You paid full income tax on the value of the shares when they were "gifted" to you (actually not "gifted" at all, just paid over as salary, only in the form of shares), so nothing about this enters into the capital gains tax calculation. It's exactly as if your employer paid you this money as cash and you turned around and then bought their shares on the open market.

Your capital gain is just the share price when you sell, minus each share's 'cost', multiplied by the number of shares you sell.

The fun part is identifying the 'cost' of a sold share. If this is just one RSU vesting event, easy. The share cost is the share price on the date your RSUs vested. Your HR department can tell you what price they used when they put this through their payroll. Otherwise, where you received the shares in several separate RSU vesting events, you have to confront HMRC's 'section 104 share pool' method of coming up with the 'cost' of the shares you sell. Helpsheet 284 offers an example. It's not super-complex, essentially just averaging, but watch out for the silly same-day and 30-day matching rules. If you are lucky, they may not apply.

littlerobbob

EdSwippet wrote: »

You paid full income tax on the value of the shares when they were "gifted" to you (actually not "gifted" at all, just paid over as salary, only in the form of shares), so nothing about this enters into the capital gains tax calculation. It's exactly as if your employer paid you this money as cash and you turned around and then bought their shares on the open market.

Your capital gain is just the share price when you sell, minus each share's 'cost', multiplied by the number of shares you sell.

The fun part is identifying the 'cost' of a sold share. If this is just one RSU vesting event, easy. The share cost is the share price on the date your RSUs vested. Your HR department can tell you what price they used when they put this through their payroll. Otherwise, where you received the shares in several separate RSU vesting events, you have to confront HMRC's 'section 104 share pool' method of coming up with the 'cost' of the shares you sell. Helpsheet 284 offers an example. It's not super-complex, essentially just averaging, but watch out for the silly same-day and 30-day matching rules. If you are lucky, they may not apply.

Amazing. So if I puschased the shares at $30 and paid tax on them at the time ( i have a certificate from my employer) and the shares are now say $300. The amount for tax purposes is $270 per share? Let's say i have 50 tha's $13,500 so under the UK CGT limit. Is that right?

EdSwippet

littlerobbob wrote: »

So if I puschased the shares at $30 and paid tax on them at the time ( i have a certificate from my employer) and the shares are now say $300. The amount for tax purposes is $270 per share? Let's say i have 50 tha's $13,500 so under the UK CGT limit. Is that right?

Close. Strictly, you have to use the USD/GBP rates in effect at the time you bought the shares (or received them as an RSU vesting) and the time you sold.

Suppose you received them when $1 = £1.40. 50 shares at $30/share is $1,500, so your 'pool cost' for these shares is £1,071.42. Now suppose the share price rises to $300, and you sell all 50 when $1 = £1.30. You receive $15,000, which is £11,538.46. Your gain is £11,538.46 less the £1,071.42 'pool cost', so £10,467.04. This is below the £12,000 UK annual capital gains allowance, so if you have no other capital gains in the year, you have no capital gains tax liability on the sale.

Did you receive them at $30 and they are now worth $300? Not exactly impossible, but it seems unlikely, so presumably these are made-up numbers.

littlerobbob

thanks but i don't understand how you get to the pool cost....

littlerobbob

PS. do i use the exchange rate from the "grant date" or "vest date"? I left the company before they all vested so I only have a portion of them to sell. I think I paid the UK tax at Vest date though.

In 2008 the exchange was 1USD = 0.50 GBP
Today it's 1USD= 0.77 GBP