Company Sharesave Scheme maturity - Tax Implications!

Moneymac06

Hi
Hope someone can help.
My OH saves into his company sharesave scheme monthly. It is a 3 year scheme which matures this August. The shares are looking to be more than the option price so he is thinking of selling the shares as they mature. Our question is, does anybody know whether you pay tax on the amount you receive from selling the shares? I.e. Option price was £1.00, share price now £1.50 approx. so on all the shares it looks like £11,000 from £7,000 paid in monthly from salary. Tried to find info ourselves, but Gov.uk website a bit confusing.

Much appreciated TIA

Jeremy535897

Is this what you are talking about:
https://www.gov.uk/tax-employee-share-schemes/save-as-you-earn-saye

Brie

from that same gov page Jeremy has listed.

Company Share Option Plan

This gives you the option to buy up to £30,000 worth of shares at a fixed price.

You will not pay Income Tax or National Insurance contributions on the difference between what you pay for the shares and what they’re actually worth.

You may have to pay Capital Gains Tax if you sell the shares.

So no income tax but CGT is possible.  So that would be on the difference between the option price of £1 & the potential selling price of £1.50.  

fyi - I've never paid CGT and have been participating in these schemes for a number of years.  But I'm also not in a high tax bracket, nor do I have other things that attract tax like this.

Moneymac06

Thanks for the replies, that makes it a bit clearer for us

Jeremy535897

Note also the wording:

"You’ll not pay Capital Gains Tax if you transfer the shares:

• to an Individual Savings Account (ISA) within 90 days of the scheme ending
• to a pension, directly from the scheme when it ends

If you do not transfer your shares to a pension immediately when the scheme ends, you can still transfer them up to 90 days later. You may have to pay Capital Gains Tax if they go up in value between when you buy them and when you transfer them."

[Deleted User]

Jeremy535897 said:

Note also the wording:

"You’ll not pay Capital Gains Tax if you transfer the shares:

• to an Individual Savings Account (ISA) within 90 days of the scheme ending
• to a pension, directly from the scheme when it ends

If you do not transfer your shares to a pension immediately when the scheme ends, you can still transfer them up to 90 days later. You may have to pay Capital Gains Tax if they go up in value between when you buy them and when you transfer them."

Know nothing about share schemes but, out of interest, presumably an annual exemption is available?

Jeremy535897

If there is a capital gain subject to CGT, it can be reduced by exemptions/losses like any other capital gain.

[Deleted User]

Jeremy535897 said:

If there is a capital gain subject to CGT, it can be reduced by exemptions/losses like any other capital gain.

Yes - it was rhetorical! 

So - on £11000 proceeds, nothing to worry about?

35har1old

Moneymac06 said:

Hi
Hope someone can help.
My OH saves into his company sharesave scheme monthly. It is a 3 year scheme which matures this August. The shares are looking to be more than the option price so he is thinking of selling the shares as they mature. Our question is, does anybody know whether you pay tax on the amount you receive from selling the shares? I.e. Option price was £1.00, share price now £1.50 approx. so on all the shares it looks like £11,000 from £7,000 paid in monthly from salary. Tried to find info ourselves, but Gov.uk website a bit confusing.

Much appreciated TIA

From Gov UK

Capital Gains Tax allowances

You only have to pay Capital Gains Tax on your overall gains above your tax-free allowance (called the Annual Exempt Amount).

The Capital Gains tax-free allowance is:

• £12,300
• £6,150 for trusts

So your gain off £4000 is exempt

Even if the gain was beyond your allowance you do not have to sell all the shares in one go.

Is there any dividends payable ? 

Jeremy535897

[Deleted User] said:

Jeremy535897 said:

If there is a capital gain subject to CGT, it can be reduced by exemptions/losses like any other capital gain.

Yes - it was rhetorical! 

So - on £11000 proceeds, nothing to worry about?

If no other gains, yes.