Transferring Tesco Shares

eric4395

Wife worked in Tesco and paye into Tesco shares, is now retired and still receives free shares twice a year. She has the paper certificates up to date (over 20,000 shares )but they are held with equiniti shareview. With the shares doing well they are worth a 6 figure sum.

Whats the best plan of action regarding transferring them to a cheaper way of selling them as i believe Equiniti has higher fees.

Where would she find the best share selling platform.

I am assuming it should be free to transfer them?

How do you go about doing this where do you start. When do you inform Equiniti you wish to transfer them.

Is there a transfer form/s to fill out .

i read something about capital gains tax when you start selling them but no idea how this would work as her paye shares with Tesco go back many years.

Anyone kind enough to offer any advice. Thanks

DRS1

I am wondering if your wife got her shares under a Share Incentive Plan. The shares she gets half yearly could be dividend shares. This pdf has some info on them

SIP_Dividend_Shares_FAQs.pdf

Does any of this sound possible?

DRS1

Looks like they may call it a Buy as you Earn Scheme

10_Tesco_SIPApps_BAYEBrochure.pdf

Woodstok2000

Equiniti will charge you to transfer shares elsewhere but it should only be a small admin fee.

If the shares are from a workplace scheme that offered salary sacrifice purchasing, national insurance and income tax may be due on any shares sold within 5 years of purchase.

CGT is usually calculated based on an average share price across all shares purchased. You should be able to get this info form Equiniti or from Tesco.

So for example, if you buy 100 shares at £1 each, and 100 shares at £2 each, your purchase price for CGT purposes is £1.50 ((100*1)+(100*2)/200)

wmb194

https://forums.moneysavingexpert.com/discussion/comment/81882480#Comment_81882480

There are no fees to transfer certificates.

"There are no fees associated with transferring certificated shares."

https://www.shareview.co.uk/4/Info/Portfolio/Default/en/Home/Shareholders/Pages/TransferCertShares.aspx

wmb194

https://forums.moneysavingexpert.com/discussion/6655115/transferring-tesco-shares

There aren't many brokers left that will allow certificates to be deposited but a good one anyway is Scottish Widows Share Dealing, formerly branded iWeb, and it's ultimately owned by Lloyds Banking Group. No account fees and £5 commission per trade.

You open an account, fill in a transfer form and send it and your certificates to SWSD and it'll have the shares transferred into your account. You don't need to inform Equiniti.

Capital gains tax is another issue. They form a 'pool' and you need to figure out what you paid for them.

https://www.scottishwidows.co.uk/investing/ways-to-invest/share-dealing-services.html

poseidon1

Sadly I would suggest your immediate priority before considering any share sales is to try and establish the pooled acquisition cost of her holding.

Without that, she will have no idea of her capital gains tax exposure if she sells more than £3,000 worth of shares each tax year.

Unfortunately unless she retained all her SAYE vesting documents for all the past distribution of shares she recieved whilst employed, establishing the cost pool will be a very demanding excercise.

The complexity of this excercise will be further complicated by the 2021 corporate reorganisation that resulted in a very large special dividend from Tesco, together with cancellation of the old share capital and issue of new replacement ordinary shares. If she retains any old pre 2021 share certificates, these are valueless, and only certs from 2021 onwards are valid.

If she has elected to receive Tesco dividends in share form rather than cash for most or all of her ownership period, those scrip dividends not only add to her accumulated share costs each year, but she may well have overlooked the fact the dividends remain declarable for income tax purposes, and have failed to pay any dividend tax over the years.

The severity of all this potential non tax compliance over the years coupled with the complex piecing together of past share costs records, indicates she will likely need the services of a good tax accountant to establish her CGT cost record as well as identify past income tax non compliance with a view to reaching a settlement with HMRC for any income tax due.

In the meantime she should curtail the shares instead of cash dividends arrangement she currently has in place. The shares are not 'free' she will be sacrificing receipt of the taxable cash dividend on each occasion, and further complicate her capital gains record keeping.

If she really has 20,000+ shares ( now worth around £100K) she would have received taxable dividends in this tax year alone to the value of £2,800 at least, upon which income tax at 8.75% ( subject to the £500 dividend allowance) will be due , assuming she is a basic rate tax payer. This rate will rise to 10.75% in the new tax year.

To assist in recreating the dividend history, Tesco have a handy dividend calculator on their shareholder site below ( albeit in pence rather than pounds!) -

https://www.tescoplc.com/investors/shareholder-centre/dividends/dividend-calculator/

DRS1

OP It is important to establish how your wife acquired the shares. There are some very similar looking acronyms knocking around here (PAYE, BAYE and SAYE). I don't think PAYE is actually relevant though.

The differences are important from a tax point of view. There is a Gov.uk page on SIPs (the BAYE scheme which I think she may have been in) here. It bears reading in full because it is very complicated - not least in working out what sort of shares she has in the plan - but scroll down to the section on Capital Gains Tax and you will see that when she sells the shares can be significant. Is she selling them while still in the SIP or has she withdrawn them from the SIP?

Share Incentive Plans: a guide for employees - GOV.UK

Of course if @poseidon1 is right and she was in an SAYE scheme then the tax treatment is different. But taking dividends as shares is not something you do as part of an SAYE scheme (there is no entitlement to dividends until after she has exercised the SAYE option) while it is as part of a SIP. Anyway she really needs to pin it down.

With both SIPs and SAYE schemes it is possible to transfer shares to an ISA within 90 days of some trigger date (with an SAYE Scheme that is the date when she exercises the SAYE option - not so sure about the SIP maybe it is when she retires? That would need checking). If she has any ISA headroom and if she is within the 90 day period that could be a thing to do with these shares (well some of them).

Woodstok2000

https://forums.moneysavingexpert.com/discussion/comment/81882579#Comment_81882579

I think you're looking at a transfer of ownership, where the shares stay with equiniti. A transfer to another provider will incur a platform fee:

https://equiniti.com/uk/help-and-support/transferring-shares/eqi-funds-fee-transferring-out#7syz6kqiwf5oq6wqjb76thwolg:7syz7dh4qby6r65mftwqh2az66

wmb194

https://forums.moneysavingexpert.com/discussion/comment/81883103#Comment_81883103

We're talking about certificates, not EQi. EQi is Equiniti's stockbroking business and is separate from it being a registrar (EQ Shareview is linked to that). It wasn't recently but I've never been charged a fee by the registrar for depositing certiifcates with a broker.

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/81882975#Comment_81882975

The number of shares quoted, strongly suggested the wife had subscribed to many SAYE schemes with Tesco over a significant number of years.

On each vesting my impression was she then opted into the dividend reinvestment plan, and has had a long succession of incremental shares acquired this way.

However, having advised a couple of Tesco employees in a similar position, I have to confess to having extrapolated their lack of knowledge of what they had been doing, with the circumstance outlined by the OP in respect of his wife.

His vagueness with regard to CGT and the mention of 'free shares' were common factors with the other Tesco employees I had cause to speak to. Of course if my assumptions are incorrect and his wife is far more knowledgeable than the OP has conveyed, then I will stand corrected.

The Tesco employees in question by the way, were at management level and in my opinion really should have known better.