Tax implication of selling stock to invest in pension or ISA

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! 

fisher66

There is no income tax liability, however there may be a Capital Gains Tax liability.

Work out how much you paid for the equity investment when you bought it. Calculate what it is worth now. Subtract the original cost from the current value and that gives you your capital gain.

You have a capital gains tax allowance of £3,000. If your gain is £3,000 or less there is no tax to pay unless you have already made other capital gains this tax year.

lastminuteinvestor123

fisher66 said:

There is no income tax liability, however there may be a Capital Gains Tax liability.

Work out how much you paid for the equity investment when you bought it. Calculate what it is worth now. Subtract the original cost from the current value and that gives you your capital gain.

You have a capital gains tax allowance of £3,000. If your gain is £3,000 or less there is no tax to pay unless you have already made other capital gains this tax year.

That's fantastic - thank you very much!

Albermarle

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