Flexable S&S ISA for HMRC SAYE scheme shares

someone

I'm looking for a recommendation for a Stocks and Shares (S&S) ISA that

• is a flexible ISA
• allows SAYE shares to be transferred in
• has low ongoing and transactional costs

A relative has an upcoming Save As You Earn (SAYE) share scheme maturing in a few months. They currently have past SAYE shares in an iWeb Share Dealing Account (so not an isa). iWebs ISA product does not appear to be flexable.

Generally, in the past, they have bought the shares and sold an amount to stay under their capital gains allowance. The balance of shares rolled into the next year and was considered for sale, subject to allowance, and so on.

Three factors have recently changed 

• The shares have performed very well, so a significant gain is expected based on the option price of the SAYE 
• The capital gains allowance has significantly reduced over recent years
• There is talk of increasing the rate of capital gains tax in the forthcoming budget

These factors all point to using the ability to move SAYE shares into an ISA. Unlike Bed and ISA, the SAYE transfer does not trigger CGT at the time of putting shares into the ISA. 

The relative has already subscribed to ISAs this tax year. The suggested approach is to find a flexible stocks and shares ISA, transfer some allowance (Cash) to the account, withdraw the cash, and then apply for the SAYE shares to be transferred in. 

I know it's a little niche, but does anyone have recommendations in this space? 

masonic

Charles Stanley (DIY platform, not advisory) would seem to fit the bill:

https://www.charles-stanley.co.uk/services/save/stocks-shares-isa

https://www.charles-stanley.co.uk/insights/commentary/transferring-saye-shares-isa

Let  us know how they get on, as this has been raised a few times on the forum as a theoretical loophole, but as far as I know remains untested in practice.

MeteredOut

I've been looking at something similar for an SAYE scheme.

Equiniti suggest an interesting approach if the value of the shares is greater than the £20K ISA allowance:

• Transferring shares to a ‘flexible ISA’ from a SAYE plan has similar features with additional freedom to take out cash and replace it in the same tax year without affecting the current year’s allowance. In practice this means participants can put shares into a flexible ISA, sell them, remove the cash, and then replace them with any remaining SAYE shares. This process can happen numerous times within the permitted 90-day period.

• Example: You exercise your SAYE option and pay £10,000 for the shares. On the day that you buy those shares the market value is £25,000, a gain of £15,000.
• Your flexible ISA allowance is £20,000 and you put £20,000 of shares into a flexible ISA.
• You then sell some shares and withdraw £5,000.
• You can then transfer the remaining shares with a value of £5,000 into the flexible ISA within the same tax year with no CGT liability if it’s within the permitted 90-day period.

https://equiniti.com/uk/news-and-views/eq-views/saye-cgt-and-eqi-s-flexible-isa/

masonic

A bit worrying that it is being suggested so openly, as I am sure it is an unintended loophole of ISA flexibility.

jimjames

masonic said:

A bit worrying that it is being suggested so openly, as I am sure it is an unintended loophole of ISA flexibility.

One I suspect that is unlikely to remain long term as it's now being suggested in such a way as it's effectively unlimited in as much as you can trade in 90 days