Clarification needed on 90 day SAYE shares to ISA transfer.

vacheron

dhokes said:

vacheron said:

dhokes said:

Re. Equiniti - does anyone else get this message on their maturity option screen? Does anyone know if you can transfer from the dealing account to the ISA easily?

"If you decide to select ‘Transfer shares to an EQi Flexible stocks and shares ISA’ an EQi Dealing Account will be included and any balance of shares over your ISA transfer limit will be transferred into your EQi Dealing Account."

OP here. I would imagine that you could, but I can't confirm as my current 5 year EQi operated scheme doesn't mature for another 2 years. However my ex-colleague (who's scheme matured before mine due to his redundancy which meant he left the scheme as a "good leaver") seems to have had a nightmare with EQi. .

Firstly they sent him incorrect information, then they did not make the full 6 payments he requested after being made redundant. They then posted out his share certificates to someone else's address, so he is now at the point where all the delays mean he is fast encroaching on his 90 day window and he still hasn't yet got all his shares in his ISA!

I think he went through EQi as it seemed easier at the time as he doesn't have an existing GIA provider. 

Personally, I think I will just try and get the shares into one of my trusted GIA providers ASAP, (along with the "letter of appropriation" from the sharesave administator which confims that the shares originated from a SAYE scheme), and do it all myself from there!  

Hmm but if its in a GIA, then the gains would be subject to CGT?

This is where the rules get vague. 

The rules say that you must transfer your SAYE shares into an ISA within 90 days of the scheme maturing, but they do not define any specific route into the ISA. 

The GOV.UK site says: 

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

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

Note that the rules are specific that pension transfers must be direct, but not ISA transfers?

It should therefore be perfectly possible to:

• Transfer all your shares to a GIA with anyone who accepts the SAYE letter of appropriation.
• Use this letter to Transfer £20K into the ISA "in specie".
• Sell the shares inside the ISA tax free, and move the resulting cash out of the ISA.
• Transfer another £20K into the ISA from the GIA using the flexible ISA rules and the letter of appropriation again.
• Continue to do this as many times as required to empty the entire SAYE scheme into cash.

Providing this is all done within 90 days, it certainly reads to me like this is permitted.

Optional: You could then choose to re-purchase the original shares outside of your ISA using the proceeds (if you still wished to continue to hold them) as the gain to date has been crystalised and the bed and breakfasting rules don't apply as the sales were in the ISA and so would not have attracted CGT in the first place. 👍

JamTomorrow

dhokes said:

Re. Equiniti - does anyone else get this message on their maturity option screen? Does anyone know if you can transfer from the dealing account to the ISA easily?

"If you decide to select ‘Transfer shares to an EQi Flexible stocks and shares ISA’ an EQi Dealing Account will be included and any balance of shares over your ISA transfer limit will be transferred into your EQi Dealing Account."

When I did mine this is what happened to me. Any excess above 20k goes into your dealing account.  So you sell 20k out your ISA then top up your ISA from the dealing account.  Mine was only about 30k but worked fine, a colleague had a 5 year scheme at about 60k and was able to recycle 40k from the dealing account through his ISA (topping up twice) making all the substantial gain free of CGT.

DRS1

I assume the worry would be that whoever was running the GIA and ISA would do a bed and ISA and that would mean you had disposed of the shares from the GIA triggering a CGT charge.  Do providers actually allow an in specie transfer from a GIA to an ISA in cases like this?

I suppose it is too complicated to have staggered exercises of the option so only £20k of shares get acquired and transferred at a time from the SAYE Scheme to the ISA.  But could the SAYE Scheme somehow hold on to the excess shares and just transfer them to the ISA on request without anything going into the GIA?

vacheron

DRS1 said:

I assume the worry would be that whoever was running the GIA and ISA would do a bed and ISA and that would mean you had disposed of the shares from the GIA triggering a CGT charge.  Do providers actually allow an in specie transfer from a GIA to an ISA in cases like this?

I suppose it is too complicated to have staggered exercises of the option so only £20k of shares get acquired and transferred at a time from the SAYE Scheme to the ISA.  But could the SAYE Scheme somehow hold on to the excess shares and just transfer them to the ISA on request without anything going into the GIA?

It appears they do. 

The clearest description seems to come from the page on Hargreaves Lansdown

What happens when my SAYE scheme ends?

When your SAYE scheme matures, you’ll usually have two options.

1. Use your savings to buy some or all the shares
   • Buy and Sell – You may choose to do this if the company’s share price has risen, you can use your savings to buy the shares and then sell them. However, you may have to pay Capital Gains Tax (CGT) on the profits.
   • Buy and Transfer - If you want to transfer your shares to an ISA or pension without selling them, this must be done within 90 days of the date you exercised your option to acquire the shares.

     When you do this through HL, your shares will first be transferred to an HL Fund and Share Account before being moved to your HL Stocks and Shares ISA or HL SIPP. Transferring the shares to an HL ISA within the 90-day period outlined above will not count as a disposal, so you wouldn’t have to pay CGT. However, as the shares are first transferred to an HL Fund and Share Account rather than directly from the SAYE scheme, transferring the shares to your HL SIPP would count as a disposal, so you may have to pay CGT.

     Once the shares are in an ISA or pension, if you subsequently sell them, you wouldn’t be subject to CGT on those sales. The transfer of shares to an ISA or pension counts as a new subscription or contribution and normal ISA and pension contribution limits apply.

DRS1

I wonder if HL do the flexible ISA thing where you have say £50k of shares following the exercise of the SAYE option and you put all £50k worth into the Fund and Share account transfer £20k worth to the ISA, sell them take the money out of the ISA transfer another £20k worth of shares from the Fund and Share account to the ISA etc etc?