SIP (Share Incentive Plan) Dividend Tax

Wispa16

Hello, I have been paying into a SIP for 15 ish years.  I now have enough shares that even a small dividend paid on each share means I have reached the £500 dividend tax threshold it is not a huge amount so is just a pain in the proverbial and not enough to warrant professional services.

I have shares in the SIP that are 'available' ie free of Income Tax & NI and these are the only ones I am looking at moving/selling.

I believe I can move the shares from the SIP & then into an ISA (within 90 days... a two-stage process) without triggering a CGT up to the ISA 20k limit. However, I have started looking at the shares purchased over the years and they are actually in a loss position in terms of Price Paid vs current value assuming a Section 104 holding FOR ALL shares in the SIP even those that I cannot access yet.

So my initial thought was just to minimise my tax liability on some of the dividends that are held in the SIP by moving what I could into an ISA but is there any advantage to doing it that way when I could just Bed & ISA and create a loss that could be utilised against other potential gains in the future?

Does anyone have any experience of SIP's? Thank you in anticipation

I think there will be quite a few people caught up in paying dividend tax now who are not really 'investors' but have merely put a few quid in their company SIP's. It seems a bit odd that they have created these schemes encouraging investment in the company you work for by giving a 'tax advantage' on one hand only to take it back with the other.... the admin for most employees will not be worth the hassle. 

 

Mark_d

I was in a SIP with a previous employer.  I chose the sell the 'available' shares and rather than re-purchasing them in an ISA, I chose to invest differently.  This (1) reduced my dependency on the business employing me and (2) allowed me to invest where I saw best potential for a return on my investment.