Bed & Isa

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82044833#Comment_82044833

A few points

The flexible ISA thing is making use of the rule that allows you to put £20k into a flexible ISA then take it out and then it back in again in the same tax year. With a non flexible ISA you can only put the £20k in once - if you take it out that's it you can't replace it.

The advantage of it in your scenario is that it is a way of selling all your (SIP or SAYE) shares without paying any CGT. You transfer £20k worth from the SIP to the ISA sell them in the ISA and take the money out of the ISA. Then you do the same thing again with the next £20k of shares until you have exhausted all £75k. You would then end up with £20k in the ISA which you can invest in whatever you like and £55k outside the ISA which you can also invest however you like.

As to who would do this for you it would be you but the ISA provider may handle the details. You would need to speak to the ISA provider and the manager of the SIP to make sure it works smoothly. For example, you need a document from the SIP manager to confirm the shares come from a SIP. Equiniti has been mentioned in the past as the outfit to use because they had done the note on it (the one I can't find) so they have experience of it. @vacheron may be able to tell you if there is a particular bit of equiniti to contact.

If you have shares which are not from a SIP (or an SAYE Scheme) then putting them direct into an ISA cannot happen - you would need to sell those shares and pay any CGT due. Or maybe you had to pay income tax on them?

DRS1

Oh and if you are going to explore the flexible ISA route be warned I believe quite a lot of S&S ISAs are NOT flexible ISAs.

all4one

"That doesn't really follow - the significance of the 90 day window is that you can transfer shares directly into an ISA (and potentially do so for all of them in one year rather than just £20K worth) during that window, starting from initially having access to the shares. When did you actually take ownership of them?"

I bought the shares over a period of 2019 to 2024 - like I say their still sitting in the Share Account but i'm getting a little nervous having so much (for me) in one share.

I assume when I take them out I'll have to submit a self tax return ? So I'm thinking is it better to sell them in one go or like I previously said year by year ? Apologies for all the questions, but as you can appreciate its a big chunk of dosh for me….

vacheron

https://forums.moneysavingexpert.com/discussion/comment/82055997#Comment_82055997

Ah, OK.

As you didn't specify in either of your earlier posts how you accumulated the shares, and as SAYE is the most common way many people come to own their company shares, many responses went with that assumption. The way you purcased the shares means that the 90 day SAYE option is not applicable.

The way you can now dispose of them depends if you perfer speed, or tax saving.

The first thing I would do (if you are married) is gift some to your spouse, especially if they earn less than you do.

You can then both sell shares with up to £3,000 worth of gains each year (providing you have not already used any of your annual capital gains allowances) without needing to declare any capital gains,and therefore do not need to submit a tax return for this reason.

If your shares have doubled in value, you could both sell £6,000 each.

If they have only grown by 10% you can each sell £33,000 worth without any tax to pay.

You can then do the same in the next tax year, and so on until all the shares are sold.

If you exceed the £3,000 gain, (for example you want to sell them faster) you will need to declare this to HMRC and pay 18% (or 24% if you are a higher rate taxpayer) GCT on any gains over £3,000. However, there is still no requirement to fill in a tax return just for this as there is a process whereby you can make a one time declaration to HMRC and just pay any GCT due directly.

DRS1

The 90 day window can also apply to the other all employee share scheme called the Share Incentive Plan (SIP) which can go by other names such as Buy as You Earn. Presumably you did not buy the shares though such a plan?

Did you buy the shares under any form of employee share scheme - eg by exercising an unapproved executive share option? I ask only because that would affect the base cost of the shares as you would have had an income tax charge on the market value at the date of exercise and that market value would be your base cost for CGT.

all4one

Yes bought most of them in Share Incentive Plan (SIP) - £150 month if i remember.

DRS1

https://forums.moneysavingexpert.com/discussion/comment/82057439#Comment_82057439

For a SIP the 90 day period starts when you take the shares out of the plan. That is not necessarily the same as when the shares come to the end of their holding period. The rules for a SIP are not straightforward but below is a government explanation. It sounds to me as if what you have are what the note calls Partnership Shares (but you may have Matching Shares and Dividend Shares as well).

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

There is a section in there about Leaving a Share Incentive Plan which says you have to take the shares out of the plan when you leave the employer. That may apply to you and if it does then the 90 day window for transferring them to an ISA may have closed already.

You should also read the section headed Capital Gains Tax. You will see that when you take the shares out of the plan is important there.

Finally there is a bit on transferring to an ISA which is almost at the end of the note.

You say the shares are held in a Share Account. It would be a good idea to see if that is the SIP or not and if not when the shares came out of the SIP. There should be a SIP administrator who may be able to help with that (and with supplying any paperwork if the transfer to the ISA is still a runner).

jaypers

Shares sold from within a Share Incentive Plan are exempt from CGT.

On the Flexible S&S ISA thing, particularly for SAYE, Barclays Smart Investor ISA is flexible.

all4one

Would you guys advise I get an accountant involved here, any idea ball park figure how much they'd cost ? Seems to complicated for my little brain and I dont want to upset the Tax folks….

DRS1

Well I could try hiding behind the "we can't give advice on here" curtain.

It sounds like you need some help. Whether an accountant is the right person I don't know. Some posters on here seem to have navigated this on their own and if they had help or guidance along the way perhaps they could say who gave it (@vacheron)? Even a personal tax accountant could spend his entire career and not come across these things. They are a bit specialist. The sort of accountants who do know about them tend to work for the employers setting them up.

An accountant should be able to guide you through the complexities. I just fear you may be paying them to bone up on the subject. Also it could be that it is not that complex. You may find the shares have all come out of the SIP and are now subject to normal CGT rules.

Personally I would get on to whoever administers the SIP and try to establish what help they can give you. I imagine they will say they can't give you tax advice but they may well be able to tell you factual things like

Are any (all?) of my shares still in the SIP?

If the answer to that is yes X shares then:

Is it true I can sell the X shares in the SIP without paying any CGT? (OK maybe too much like advice)

How do I go about selling shares still held in the SIP?

How do I go about transferring shares from the SIP to an ISA? Can I do that in instalments? When does the time limit of 90 days expire?

If the answer to the first question is no then you might ask when did they leave the SIP to see if that was less than 90 days ago.