Share in Success guidance - Sharesave scheme help

nirajb_uk

Hi everyone,

I'm hoping somebody can provide some advice on the below.

During my previous employment, I entered into their Share in Success scheme where I was given the option to invest a certain amount of my salary into the company I worked for. In order for these to be tax free, I would need to have stayed in the scheme for 5 years, at which point I would then not have to pay tax or NI.

However, as I've left the organisation after 3.5 years, I am now no longer allowed to be part of the scheme and I either have to sell my shares or transfer them into my own broker account.

The question is, looking at what I invested, the value of the shares has gone down (I fully appreciate this can happen) and therefore if I were to sell, I'd be selling at a reduced rate plus I'd need to pay tax and NI on them so I wanted to gauge on whether it's simply worth me transferring these into a broke account and then hope that the values go up at some point for me to then sell them.

Although I'll still have to pay tax and NI on them for transferring them, atleast I will have the option to sell them if they were to increase in value.

Any support or guidance in this would be appreciated.

Thank you.

Linton

How much is the current value of your holding?  Is any likely profit worth the hassle of setting up a new account as opposed to simply selling and adding the money to your other investments/pensions? From your knowledge of the company do you have any reason to believe your ex employer will perform better than anything else?

nirajb_uk

Hi Linton,

Thanks for the quick reply.

The current holding is £5,547.53, however, I've actually invested £6,450 to date (£150 per month for 43 months). I suppose I'd just want the money back I invested but totally appreciate that this isn't always the case with shares as they can always go up and as well as down.

Am I able to share on here who the company is? I won't be breaking any rules if I do? 

MX5huggy

Let’s say they are worth £5k.

if I gave you £5k today would you invest it in this company? Probably not. 

nirajb_uk

You're absolutely right but I suppose the way I'm thinking is that if there is a potential for them to go up and I already have them, is it worth potentially waiting it out to see if they do?

nirajb_uk

Any other guidance on this would be great.

Sumselkb

I don't know a lot about this kind of stuff myself, but one thing you haven't mentioned is if dividends are involved?

I pay into a share save scheme with the company that I work for and whilst the share price goes up and down a lot over the years the thing that I look at most is the amount of dividends that are added to my account.

So would you get dividends and would they add a lot of shares to your account over time?

TheBanker

nirajb_uk said:

You're absolutely right but I suppose the way I'm thinking is that if there is a potential for them to go up and I already have them, is it worth potentially waiting it out to see if they do?

There is potential for them to go up, or go down.

If you sold these shares, you could invest the money in something else which also has the potential to go up or down, so that's not a reason to keep these shares. Generally holding single company shares is more risky than investing in funds. Whether investing is right for you at all depends on both what other savings/assets you have, and what you plan to do with the money.

NB: The thread title says it's a Sharesave plan, but it sounds more like a Share Inventive Plan. 

wmb194

Which company? You won't be breaking any rules to disclose this. 

For me it depends on two things, the company and the context within your finances. 

If it's a good company like Legal & General I'd probably hold and hope and bank the dividends along the way but if it's a challenged business/industry or one that's in decline e.g., IAG, Royal Mail I'd sell.

If it's all the money you have then sell and diversify or just hold as rainy day cash but if it's a small part of a larger portfolio perhaps what you do matters less.