Company RSU share or re-invest in S&S Isa

ppyim

I have some shares from my employer (a USA company) through RSU plan worth around £3000 (based on price of last week, the share price is down 20% since then), and expect to receive another £2000 worth of shares next year. I have no plan to spend the money in the next 5 years and would like to keep it as a fund for my son's education after 5 years. However I am not sure should I,
a) leave the shares as it is and sell it after 5 years, or 
b) sell the shares and re-invest in S&S ISA with a fund such as Vanguard Lifestrategy 60%?
CGT is not a big concern for me since it is very unlikely that the profit of selling these shares will exceed CGT limit. It is however not a good time to sell it now with a 20% loss. I don't have any S&S ISA so not sure whether it will be a good choice for a period of 5 years for investment. But the option of diversity is clearly the advantage to re-invest in S&S ISA.

What are your thoughts please? Any advice is welcome.

EdSwippet

ppyim said:

What are your thoughts please? Any advice is welcome.

If your employer had given you cash in place of RSU stock, would you have used that cash to buy your employer's stock?

If yes, then keep the RSU stocks. If no, then sell them and do what you would have done had you received cash rather than RSUs.

ppyim

Thanks EdSwippet. With the cash I probably use to make overpayment for mortgage. I need to admit that I am not a good at investment, always hope the share price will go up a bit and missed the opportunity to sell them immediately.

Albermarle

What are your thoughts please? Any advice is welcome.

What is your pension situation? Normally this is more of a priority than buying shares etc .

Also would help to know your age and approx. salary 

ppyim

Albermarle said:

What are your thoughts please? Any advice is welcome.

What is your pension situation? Normally this is more of a priority than buying shares etc .

Also would help to know your age and approx. salary 

Thanks Albermarle for your opinion. The pension pot is ~£100k. I am in early 40s and the salary is just below £50k. I do take advantage of the maximum match of employer contribution so it should be ok as it is. 

sarcopomp

I get RSUs from my US-based employer as part of my compensation. There are a few numbers to juggle.

Share Price
Sell while high, obviously.

Trading
There may be charges for selling. Your employer chooses the broker so you are stuck with the fees they impose. Some trading costs may be forced on you - like "sell to cover" taxes owed. Fortunately trading costs in the US are trending towards zero because of a company called Robinhood.

Taxation
Make sure you fill in the IRS form to avoid double taxation. You should be prompted to do this.

Disbursement
Sending money out of the broker may cost money. Until this year I had no option to hold cash in my broker so every sale triggered a transfer charge.

Currency
If you are lucky there is a choice between the broker's exchange rate from USD to GBP or your receiving bank's exchange rate from USD to GBP. Neither are going to be generous and you do not get to see the rate before the trade. I opened a borderless account with TransferWise to get a US account number. I can just send the dollars to it and choose currency trades later at lower cost.

ppyim

sarcopomp said:

I get RSUs from my US-based employer as part of my compensation. There are a few numbers to juggle.

Share Price
Sell while high, obviously.

Trading
There may be charges for selling. Your employer chooses the broker so you are stuck with the fees they impose. Some trading costs may be forced on you - like "sell to cover" taxes owed. Fortunately trading costs in the US are trending towards zero because of a company called Robinhood.

Taxation
Make sure you fill in the IRS form to avoid double taxation. You should be prompted to do this.

Disbursement
Sending money out of the broker may cost money. Until this year I had no option to hold cash in my broker so every sale triggered a transfer charge.

Currency
If you are lucky there is a choice between the broker's exchange rate from USD to GBP or your receiving bank's exchange rate from USD to GBP. Neither are going to be generous and you do not get to see the rate before the trade. I opened a borderless account with TransferWise to get a US account number. I can just send the dollars to it and choose currency trades later at lower cost.

Hi Sacopomp, thank you very much for your very detailed guidelines. I am aware some of them like the us tax form, but not all, particularly the Transferwise account. It will save me quite a bit on currency exchange :T , if the share price could recover.