Tax efficient way to convert share certificate to cash

singerpapillon

If one is due a share certificate (ex-employee ShareSave shares) and would like to have as much value accessible as cash (because Life) while being tax efficient, what is the best way of navigating the sale, CGT and other such pitfalls?

eskbanker

Best place to start will be to examine the options explained in the scheme rules, but in most cases, shares from qualifying schemes can be transferred into an ISA, but subject to the annual allowance.

singerpapillon

eskbanker said:

Best place to start will be to examine the options explained in the scheme rules, but in most cases, shares from qualifying schemes can be transferred into an ISA, but subject to the annual allowance.

I tried, but as an ex-employee no advice is provided.  I am advised I will have a share certificate and it’s up to me to seek advice or formulate my own plan.  This was told to me today, hence why I came here.

eskbanker

Unusual to be issued with certificated shares, but if that's what you're starting from then the usual recommendation to sell them is to use a low-cost broker such as https://www.x-o.co.uk/how-to.html#transfer-certs if they're listed on a supported exchange.

The subject of taxation is a broader one that needs more information, which should be contained within the scheme rules - if you don't have access to these by virtue of no longer being employed then the employer should make them available without it being construed as advice.

singerpapillon

eskbanker said:

Unusual to be issued with certificated shares, but if that's what you're starting from then the usual recommendation to sell them is to use a low-cost broker such as https:// www. x-o.co .uk/how-to .html#transfer-certs if they're listed on a supported exchange.

The subject of taxation is a broader one that needs more information, which should be contained within the scheme rules - if you don't have access to these by virtue of no longer being employed then the employer should make them available without it being construed as advice.

Not necessarily unusual where one is initially within a ShareSave scheme but leaves that employment mid-scheme.

In this case, the total value of the cert to be issued exceeds (on predicted value) the total allowance of 2
ISAs BUT the 90-day period following date of issue straddles 2 tax years.

Transparently, the ‘ask’ is - what is the most tax-efficient way of converting those shares to ready-cash within the 2025 calendar year?  Any help appreciated, ofcourse

timrowlands

You can transfer SAYE employee shares into an S&S ISA within 90 days of exercise. You can only transfer up to your unused annual allowance, so a maximum of £20k per tax year. If the exercise can be delayed to mid January next year you could straddle 2 tax years and potentially get £40k in. No requirement to hold them, they can be sold immediately once inside the ISA and all tax free. The valuation of the shares is market rate on the date they are transferred into the ISA. If the ISA route is closed off to you, you can only make gain of £3k per tax year without paying CGT. If married, you could transfer the shares into joint names (or gift some to your spouse) and make up to £6k of gain per tax year without CGT.