Sharesave Scheme and CGT another one

ak121078

Hi Guys

I've read through some of the similar threads and i was hoping someone could advise on my situation.

i'm paying £150 a month on a 3 year scheme so £5400 cost.
The scheme ends in december and I think i'll get a return of £28000 in total.

I've put the numbers in the gov CGT website and as im a higher rate taxpayer if i wanted all cash i'd have to pay about £2000 CGT.
cut n paste from the website.

-----

Your total gain

Value when you sold the shares

£28,000

Minus the value of the shares when you acquired them

£5,400

Minus all costs

£0

Total gain

£22,600

Your deductions

Capital Gains Tax Annual Exempt Amount used

£12,300

Total deductions

£12,300

Your taxable gain

Total gain

£22,600

Minus deductions

£12,300

Taxable gain

£10,300

Your tax rate

These rates are based on your Income Tax bands:

£10,300 taxable gain multiplied by 20% tax rate

£2,060

Tax to pay

£2,060

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am i correct in thinking that i can take out £17700 in cash without paying CGT?
For the remaining £10300 , i was going to go with the stocks and shares ISA route.
How long does transfering the shares to an S&S ISA take?
Can you recommend a provider of S&S ISA's with low fees?
How long after i move the shares to the ISA  can i sell them and take the cash out?

Thanks in advance for your help.

regards

milton1970

You could always transfer £20K of investment to a S&S isa within 90 days (assuming that you haven’t used this year) & liquidate that way avoiding CGT. Also options to gift to partner & avoid tax.

Dead_keen

"am i correct in thinking that i can take out £17700 in cash without paying CGT?"

No.  Your base cost (the £5,400 you paid) is apportioned.  So if your gain is expected to be £22,600 and you want to realise a £12,300 gain this year then you need to sell 54.4% of your shares (£12,300 / £22,600). That means you will get less cash than you mention.

ak121078

how would i calculate the amount of shares i could "cash" without having to pay CGT?
I cant seem to get my head around it

eskbanker

ak121078 said:

how would i calculate the amount of shares i could "cash" without having to pay CGT?
I cant seem to get my head around it

1. Work out the gain per share, i.e. sale price less purchase price (less any relevant costs), which, based on your figures, will be £22,600 divided by number of shares
2. Divide the annual CGT allowance (£12,300) by that number, to give the number of shares to sell.

Dead_keen

ak121078 said:

how would i calculate the amount of shares i could "cash" without having to pay CGT?
I cant seem to get my head around it

Work out the gain per share (e.g. sale price per share - exercise price per share).  Divide the annual allowance by that gain per share.  That then tells you how many shares you would need to sell to get a gain equal to your annual allowance. 

To get the cash amount, multiply the number of shares by the sales price per share.

The reality is you will probably have to estimate the sale price per share as you won't know what this is until you sell the shares.

Small print: This also assumes that (i) you sell the shares on the same day as you acquire them, or (ii) have no other shares in that compant and don't acquire any more in the next thirty days. Otherwise, the capital gains tax matching rules may mean that the gain is calculated in a different way.  If that is relevant you can google "capital gains tax matching rules".  It also ignore selling costs (e.g. if there are £10 of selling costs then you can sell more shares so that you get an extra £10 of gain).

ak121078

hey guys, thanks for the info so far, I appreciate it.
Can you recommend a provider of S&S ISA's with low fees? (that will accept shares from the NYSE?)
How long after i move the shares to the ISA  can i sell them and take the cash out?

milton1970

Certain that there are various options on S&S isa providers - I went for iWeb (£100 to open but then low fees to trade) when I had similar issue but there are others.

You have 90 days to transfer SAYE shares to isa post maturity & you are limited to the annual £20K allowance (assuming you haven’t used it yet this tax year). There are a few forms that you need to get from the SAYE provider & transfer can be slow (need to chase it up).

If your holding is > £20K then you will only be able to transfer a proportion (need to estimate that) with the residual remaining with other provider.

Once in S&S isa you are free to sell immediately outside of any CGT calc. Residual can be also sold but that will require CGT to be considered - I assume if split in a smart way you can avoid CGT

But you only have 90 days to transfer out

Should add that any shares transferred are revalued / valued at market value at point of transfer not original cost.