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Transferring sharesave to ISA

private123
Posts: 13 Forumite

I exercised shares in a company sharesave scheme in February and transferred them to a stocks and shares trading account. I have requested that the provider now transfer some of them into a shares ISA using a 90 day transfer which would mean the transferred shares are protected from CGT, and also provided them with a letter of appropriation from the original sharesave company. (You are allowed to transfer shares into an ISA within 90 days of exercising them, even if it is in the following financial year). In the intervening time I have bought and sold some of the shares several times (but never all of them). I have used cgtcalculator.com each time I have sold to verify which of the shares I am selling - i.e, which are from the original "104 holding" and which were ones I have previously sold and re-bought. According to cgtcalculator.com I have never sold enough of the original shares to prevent me transferring £20k worth of the remaining shares to and ISA and therefore once they are in the ISA they should be CGT free. However, my Share account provider is adamant that I cannot now transfer any of my shares to the ISA using a 90 day transfer. I realise this is probably and edge case, but does anyone know the rules in enough detail to know if I am right or wrong ?
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Comments
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https://www.gov.uk/tax-employee-share-schemes/transferring-your-shares-to-an-isa only gives a fairly high-level overview but would seem to confirm your provider's view that you'd need to transfer directly from the sharesave scheme to the ISA rather than via an intermediary trading account.
However, rather than a transfer, there shouldn't be anything to prevent you from Bed & ISAing, i.e. selling £20K worth and rebuying them within a S&S ISA, using up your 2020/21 ISA allowance if you haven't already done so though?
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They are saying that I need to transfer directly from the sharesave scheme to the ISA, that is definitely not the case. As long as you have a letter of appropriation from the sharesave scheme administrators (which I do) stating that the shares were from a sharesave scheme. Many of my colleagues have done so successfully with the same provider using the same procedure. The problem is that they are saying I have sold all the shares and re-bought them, which I haven't as I have always left a good chunk un-sold. They think that because IN TOTAL I have sold more shares than I originally had (but not all at the same time) even though I have bought back several times as well. I believe that share matching rules mean that I still have some of the original shares and cgtcalculator backs that up.
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The Individual Savings Account Regulations 1998 alter how the capital gains tax legislation works.See www.legislation.gov.uk/uksi/1998/1870/regulation/34/madeIn 34(3), it appears to be saying that where you hold some shares which are eligible for direct transfer into an ISA and others which aren't eligible, you are first treated as having disposed of the shares which are not eligible. Which is more favourable than what you were assuming, for the purposes of how many you are allowed to transfer into an ISA.(It also implies that your CGT calculations were incorrect, which could be favourable or unfavourable to your CGT position, depending on the circumstances.)So I think your account provider's statement is incorrect. However, it is possible that they would fall back to saying that it may be allowed legally, but their IT systems can't cope with it, so in practice they won't let you do it anyway.0
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Thanks a lot. That is really helpful. At least I have something to show them if they keep insisting I have sold them all. Won't help me much if their IT systems won't allow it though. I don't think it changes my CGT position though, as that seems to be the same rules which apply when calculating CGT.
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It might change the CGT position, depending on the sequence of events.E.g. Suppose you first have 100 shares from the scheme. At a later date, you buy 100 more. At an even later date, you sell 100.In that case, you are treated as having disposed of the 100 shares you bought on the later date, not any of the 100 shares from the scheme. So your CGT cost for the disposal is the cost of the second 100 shares, not 50% of the pool cost for all 200 shares.0
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