Employee Share Investment Schemes & CGT

ursa_maximus

Over 18 years I bought a tranche of shares in my employer every month as part of an Employee Share Investment Programme. These were paid for direct from my salary before tax was deducted. These were (we were told) tax-free as long as they were held for at least three years. So far so good. 18 years later I have retired and I'm looking into the mechanics of selling them should I need to. I am told they would be eligible for Capital Gains Tax, which is reasonable. But, as I understand it, CGT is calculated on the gain in value. But how do you calculate the baseline value when they were bought in 200+ tranches over almost 2 decades, during which time the shareprice swung between 60p and £5.00 ?

Brie

You should be able to log on to some website where you have managed your various plans over the years and there will be historical record of your buys and sells and a summary that shows the total you hold and the cost to you for purchasing them.  I've been told all I need is the average cost to ME (not to the company) to buy my shares - whether it was a share save or share purchase.  

My employer had a matching purchase for the first £600 worth each year so I had set myself up for share purchase at £50 a month which got me £100 worth of shares.  The summary shows the total number of shares but only what I paid for them.  So even though I was essentially getting the shares at half price it's the average of the money I shelled out each month that shows.  So for me the cost for buying mine was about £1.90 a share even though with the matching shares I know in my head that i can sell them at £1 or £1.10 and still make a profit.  Obviously I'm waiting for the price to head way up over £2.50 before I plan on selling anything.  So CGT will be on (£2.50-1.90) x number of shares.

ColdIron

Were you provided with, or could you obtain, certificates detailing the number of shares acquired and their price for each tranche? You could derive the price from the cost on your payslips if you have them

ursa_maximus

I think all I need (in that case) is the date when the limit changed from £125 p/m to £150 p/m and I should be able to calculate it. the problem could come if I need to prove it. Thanks for the feedback guys.

p00hsticks

Too late for you now but for others with some employee Share Schemes, there may be an opportunity to move them into an ISA at the point you obtain them, which would remove them from any future CGT liability. 
Tax and Employee Share Schemes: Transferring your shares to an ISA - GOV.UK (www.gov.uk)