Capital gains on sharesave

adamski92

Hi all,

I joined my companies sharesave in 2020 as the price had gone through the floor due to the covid pandemic. It was a no brained and the scheme matures in December of 2023. As my wife and I couldn't afford to invest the full £500 into the scheme we got our parents to invest, to maximise the gains.

My question is for the purposes of CGT do our parents own the shares and declare them to HMRC themselves or as it comes through my pay alone is it my tax burden for me to declare?  

I am in finance but not focused on tax so don't know the nuances!

Any help is appreciated

Jeremy535897

It all depends on what you mean when you say that you "got your parents to invest"? If you simply mean that they lent you the money so you could make the maximum investment, then the shares are yours and the tax consequences follow from that. You would pay your parents back out of the net proceeds.

AntoMac

It will be in your name won’t it @Adamski92 ?

Therefore any CGT liability will be your burden. 
I reckon your employer might offer a free ISA on maturity, which you can add up to £20k worth of shares to, if you  haven’t already invested your allowance. Maybe mention to a trusted work colleague (not the bit about doing it for your parents) but the bit about the ISA and the Capital Gains Tax issue. 

[Deleted User]

Hi,

as you are paying for the shares through your salary the shares will be registered to you.

The monies from parents, was it a loan or an investment?

Never heard of a non employee being able to buy into a company sharesave, if you were to keep all the proceeds, how could they claim their share?

adamski92

Thank you both for your responses. I thought it might be the case that the liability would be mine. You are correct that parents essentially top up what I lose from salary under the agreement that they benefit from the scheme the way that we do. Of course it is all deducted from my wage but as its the first sharesave scheme I've ever entered I wasn't sure! 

I wasn't aware of the ISA, I don't think it is something we will do as we have things that we would like to spend the proceeds on but that is handy to know for future! 

adamski92

frugalmacdugal said:

Hi,

as you are paying for the shares through your salary the shares will be registered to you.

The monies from parents, was it a loan or an investment?

Never heard of a non employee being able to buy into a company sharesave, if you were to keep all the proceeds, how could they claim their share?

Its more of an agreement between us that the full amount gets deducted from my pay (£352) but we could only afford £150 and so they pay me £202 per month in exchange for whatever that proportion of shares would be.

As I am very likely to buy and sell straight away it will just be repaid to them straight away I'm just trying to plan in advance 

Jeremy535897

Then the capital gains tax bill is yours, but it will reduce the overall profit that you then pay 202/352 of to them . You keep 150/352.

AntoMac

adamski92 said:

Thank you both for your responses. I thought it might be the case that the liability would be mine. You are correct that parents essentially top up what I lose from salary under the agreement that they benefit from the scheme the way that we do. Of course it is all deducted from my wage but as its the first sharesave scheme I've ever entered I wasn't sure! 

I wasn't aware of the ISA, I don't think it is something we will do as we have things that we would like to spend the proceeds on but that is handy to know for future! 

I am pretty sure you can put them into the ISA when your Sharesave matures (or at least £20k worth) for the tax benefit then sell them immediately. 

Assuming the current value of your option is about £33,100 give or take (reckon I might be pretty close there?!) and assuming the value is the same when you come to sell them (big assumptions I know) you’d still be liable for Capital Gains Tax on any gains on the remaining £13k or so. The gain at current prices would then be very close to your £6K Capital Gains tax limit I reckon