How do I calculate tax on shares?

Jemma01

noitsnotme said:

Jemma01 said:

Thanks peeps for helping me save my pennies 😁👍

eskbanker said:

Worth spending time reading the brochure for your employer's scheme as these are often set up in a tax-efficient way anyway, as per https : // www.gov.uk/tax-employee-share-schemes

https : // www.gov.uk/capital-gains-tax and https : // www.gov.uk/tax-sell-shares are also useful overviews of taxation in this area, if applicable....

Thanks for your help, on the last link, i had tried to use the calculator earlier in the month, but when it asked me "How much did you pay for the shares", i stopped there and that's where this post  was born from, because for the 20 shares I want to sell, i can't specify which of the shares they should be be selling (in other words, i can't say sell by oldest first, or maybe that's what they do?) so I never really understood how to workout the tax amount to see whether i hit the limit or not. 😫

I'll dig out the paper work to find out what type of scheme it is, i hope it is tax efficient

There are basic rules to determine which shares you sell first.  See ‘matching rules for disposals’ here - 

However I’m not sure if them being in an employee share scheme changes any of that.

That's a good call, I couldn't find anything when logged in to the account (US computershare), but that could be because I wouldn't have used these search terms either 😖, I'll give it another look, thanks a lot 🤗

p00hsticks

If you don't currently utilize your annual ISA allowance, and the shares are in a mainstream company listed on a recognised stock market that are eligible to be held inside an ISA, then you should also consider doing a 'Bed & ISA' - that is, selling the amount of shares that give you a gain up to your unused Capital Gains Tax Allowance, moving the money into a Stocks and Shares ISA and then rebuying the shares inside it - that way you don't need to worry about CGT and/or dividend tax going forward as the shares will be sheltered from all of that.

Beware that I think some share schemes require you to hold the shares for a certain amount of time in order for HMRC not to effectively treat them as a salary / benefit and therefore subject to income tax.

I believe some company 'save as you earn' share schemes actually allow you to transfer directly into an S&S ISA for a short time after maturity, although your doesn't sound like such a scheme.

As an aside, if you do think about moving the shares into an ISA, then seriously consider if you would buy those particular shares again or if you would be better off with your egg in another basket (such as global tracker fund). Without knowing your particular company or personal circumstances, in general having your savings invested in a company you work for means that a serious downturn in their fortunes could end up with you both losing your job and seeing your savings eroded in one foul swoop.

Jemma01

p00hsticks said:

If you don't currently utilize your annual ISA allowance, and the shares are in a mainstream company listed on a recognised stock market that are eligible to be held inside an ISA, then you should also consider doing a 'Bed & ISA' - that is, selling the amount of shares that give you a gain up to your unused Capital Gains Tax Allowance, moving the money into a Stocks and Shares ISA and then rebuying the shares inside it - that way you don't need to worry about CGT and/or dividend tax going forward as the shares will be sheltered from all of that.

Beware that I think some share schemes require you to hold the shares for a certain amount of time in order for HMRC not to effectively treat them as a salary / benefit and therefore subject to income tax.

I believe some company 'save as you earn' share schemes actually allow you to transfer directly into an S&S ISA for a short time after maturity, although your doesn't sound like such a scheme.

As an aside, if you do think about moving the shares into an ISA, then seriously consider if you would buy those particular shares again or if you would be better off with your egg in another basket (such as global tracker fund). Without knowing your particular company or personal circumstances, in general having your savings invested in a company you work for means that a serious downturn in their fortunes could end up with you both losing your job and seeing your savings eroded in one foul swoop.

Indeed! the value was 84.05USD, and with covid it dropped to 53.5USD, and now recovering bit by bit (79USD now). Terrible idea having them in one place. I'm now trying to get more comfortable with the share business to make better investment choices.
It is the New York Stock Exchange; the company's contribution is taxable and they collect the income and NI tax before the shares are purchased. Thankfully I can sell/transfer immediately with no holding time. But I can't see an option to transfer on the Computershare website, so I probably need to call if I want to do so.
I'll get my google goggles out on the ISA tip you've mentioned, I don't have one yet. Thanks so much for taking the time 🌹