Paying tax when transferring investments

lastminuteinvestor123

Hi there
I have an equity investment that I bought in a year when I had already maxed out my stocks and shares ISA allowance and didn't have a pension product I could pay it in to. Now I would like to sell them and put some in my pension and some in next year's ISA allowance. The company (Vanguard) says the process is that I sell the shares first, they deposit the cash in my bank account and then I invest the cash in my pension and/or new ISA. Does anyone know what the tax implications are of them being sold and going into my bank account, albeit for a couple of days? Would I have to declare that as income on my next tax return? Many thanks! 

eskbanker

Selling the investments may give rise to a capital gains tax liability, but there wouldn't be any income tax impact, beyond any interest paid on your current account.

Bookworm105

you will not be exempt from CGT just because the money is eventually paid into a pension or ISA

the sale of the investment will realise a gain which will be subject to CGT on your tax return (if in excess of your CGT allowance)

poseidon1

lastminuteinvestor123 said:

Hi there
I have an equity investment that I bought in a year when I had already maxed out my stocks and shares ISA allowance and didn't have a pension product I could pay it in to. Now I would like to sell them and put some in my pension and some in next year's ISA allowance. The company (Vanguard) says the process is that I sell the shares first, they deposit the cash in my bank account and then I invest the cash in my pension and/or new ISA. Does anyone know what the tax implications are of them being sold and going into my bank account, albeit for a couple of days? Would I have to declare that as income on my next tax return? Many thanks! 

In addition to comments already made, bear in mind  just after 6 April you can repeat the entire excercise, use your 2025/26 CGT exemption early as well as obtain your SIPP tax relief sooner rather than later, if placing new monies in that structure.

There is an odd habit of delaying and then rushing this kind of excercise towards the end of the tax year, and missing out on tax free returns for the period concerned.