SIPP Providers who allow 'in specie' transfer from maturing SAYE to a SIPP

poseidon1

https://forums.moneysavingexpert.com/discussion/comment/82149096#Comment_82149096

OP, @vacheron may well have identified a route by which you to could have your cake and eat it by washing your SAYE shares through an EQI flexi ISA , and using each tranche of your isa withdrawal proceeds to top up your SIPP ( a virtuous tax saving circle).

However, in your circumstances I would immediately explore with your scheme whether they do in fact support multiple share transfers within the 90 day window when the time comes for you to try and execute this interesting strategy.

Incidentally the following reddit thread suggests Barclays and Charles Stanley may also be participating flexi isa providers in this space -

https://www.reddit.com/r/UKPersonalFinance/comments/1kj7stv/sayesip_how_to_handle_shares_over_20k_isa_limit/

Hopefully we will see from you both whether in the coming months this is indeed a situation of 'who dares wins' 🙂

DRS1

However, in your circumstances I would immediately explore with your scheme whether they do in fact support multiple share transfers within the 90 day window when the time comes for you to try and execute this interesting strategy.

Maybe discuss it with your chosen ISA provider as well. I am thinking that the SAYE Scheme may say you have one exercise date and you have one allotment/transfer date (which would be within 30 days of the exercise date). They may not be interested in doing piecemeal transfers or issues of shares (especially if they are a listed company and have to announce whenever they issue new shares).

So what may happen is you exercise the option, the Company issues the shares to you within 30 days (maybe into a GIA), you get a letter of appropriation from the Company setting out the details your ISA provider needs but especially confirmation that the shares come from an SAYE Scheme and when you exercised the option. Then you transfer the shares from the GIA to the ISA (sell the shares in the ISA remove the money and add more shares etc). All within 90 days of the exercise date.

Since Tesco gets a mention I thought I would look at the rules of their SAYE Scheme. The usual exercise provision has a rather quaint provision about issuing a definitive share certificate following the issue or transfer of the shares but does allow for some other evidence of ownership. It then has a rule which reads as follows

"13.5 .The Company may, if the Optionholder so requests in writing, allot and issue or transfer some or all
of the Shares to:-
13.5.1 a nominee of the Optionholder (provided that beneficial ownership of the Shares vests in
the Optionholder);
13.5.2 an account manager (or their nominee) of an individual savings account on terms that the
Shares shall be in the beneficial ownership of the Optionholder notwithstanding that title to
such Shares shall be vested in the account manager or their nominee or jointly in one of
them and the Optionholder; or
13.5.3 the trustee or manager of a defined contribution pension scheme registered within the
meaning of section 150(2) of the Finance Act 2004 (which may include a stakeholder
pension scheme)

and for the purposes of Rule 13.5.2, the terms 'account manager' and 'individual savings account'
shall have the meanings they bear in the Individual Savings Account Regulations 1998
(SI 1998/1870)."

Now it may be that the "request in writing" bit is covered by words in the exercise form for the SAYE Options (with maybe a box to complete with how many shares go where). Or you may have to do something special. But it would be worth checking if your SAYE Scheme has similar wording (SAYE Schemes tend to follow a fairly standard form so probably it does) and what the exercise form says.

gopalgriffith

I have already checked with my SAYE scheme provider to confirm they do allow transfers out in tranches (originally splitting between 2 tax years and the rest into a SIPP.

I have just realised my scheme matures December 2027, not 2026 - I must be getting old 😥 - so I have a bit more time to think about this. I then have a few months to exercise the options which will start the 90 day clock.

It occurs to me that another advantage of having extra time, is I will put £20k into a (probably) Equiniti ISA this tax year and then move it out early next tax year (well ahead of the exercising my SAYE options). I should then be able to do transfer in £40k tranches, rather than £20k tranches.

Thanks for all your comments and suggestions. I will certainly keep you all updated on here, in case helpful for others.

Gopes

vacheron

It occurs to me that another advantage of having extra time, is I will put £20k into a (probably) Equiniti ISA this tax year and then move it out early next tax year (well ahead of the exercising my SAYE options). I should then be able to do transfer in £40k tranches, rather than £20k tranches.

@gopalgriffith You've just reminded me of something that popped up a few weeks ago when I was using AI to search for flexible ISA's which allowed SAYE transfers.

I thought is was an AI hallucination as it sounded too good to be true at first, so I was going to post on here to see the opionin of some real human experts, and your post about the £40K is the perfect opportunity.

Basically, the AI I was using (Gemini) gave me the answers I wanted regarding moving out shares in £20K chunks, but it then elaborated to say that another benefit of doing this is, because it is a flexible ISA, it resolutely beleived that when I was done I could then move the total withdrawn amount (potentially £100,000+) right back into the ISA in that same tax year.

Gov.uk simply says:

If your ISA is ‘flexible’, you can take out cash then put it back in during the same tax year without reducing your current year’s allowance. Your provider can tell you if your ISA is flexible.

This would mean that I could effectively rebuy all the original SAYE shares (or indeed any new shares / funds of my choosing) back inside my ISA to protect them from future GGT etc.

Now this really sounded too good to be true, but reading the flexible ISA rules, the wording does indeed make it seem like this could be possible. But even I don't think my luck would be that good! 😯🤞

DRS1

My understanding of flexible ISAs is a bit rudimentary but in order to move £100k back into it wouldn't you already need £80k in there from previous tax years (then add the £20k for the current year) to get you to the £100k? And you would need to have taken the £100k out in the current tax year.

The mere fact of putting £20k into the ISA in the current year five times (and taking it out again) would not give you £100k of headroom on its own (if that is what AI was suggesting).

vacheron

https://forums.moneysavingexpert.com/discussion/comment/82150344#Comment_82150344

This is indeed what AI was theorising which is why I was so sceptical.

If this was possible, it really would be a case of having your cake and eating it. But I don't really need this possibility, as it would be better for me to put it in my SIPP to gain the tax relief instead, so it is really more an academic curiosity at this point, especially as it sounds like very few have tried this before (at least very few on the forums I frequent).

I guess it all comes down to how HMRC or the ISA provider (as it seems that HMRC often defer to their judgement on these matters) consider how the SAYE is being trasnferred to your ISA.

1. If the SAYE in-specie transfer is considered like multiple £20K ISA transfers of previous years subscriptions, this would allow the entire ISA balance to be removed and subsequently replaced. You would then also be free to add this year's ISA allowance on top if you had not already used it.
2. If the SAYE in-specie transfer is considered as a transfer of this years subscription, this could result in a dichotomy because it should be impossible to transfer more than £20,000 under normal circumstances.
3. If the SAYE in-specie transfer is considered like an equivalent cash deposit equalling the value of the shares being transferred, the rules would clearly limit you to replacing just that year's £20K.

My feeling (unless there is another option) is that the most likely way to shoehorn this specific and esoteric scenario into existing financial systems would be to use either option 1 or option 3, but I've no idea how someone would go about finding out for certain (apart from just suck it and see). 🤨

DRS1

It never occurred to me that it would be anything other than option 3.

I think AJBell at least would second that thought based on their note about transfers from SAYE to ISA where they talk about needing to check if you have enough of this years ISA allowance left (that wouldn't be relevant to option 1)

How do I make a SAYE or SIP transfer into AJ Bell? | AJ Bell

Of course I don't know what EQI say about it

vacheron

I'm strongly inclined to agree as supported by every scheme that has explained this method emphasising the £20k limit.

I think what has thrown the A.I. is that many articles you find imply that you can replace ALL the money you have withdrawn from a flexible ISA in the same tax year providing it is paid back into the same Flexible ISA account it was withdrawn from. So the A.I. is simply adding up all that years' withdrawls!

These articles probably also make the logical assumption that any money in excess of £20K could only have really come from previous years subscriptions, so may not explicitly mention that.

The A.I. therefore seems to be considering that as you have scooped out 5 or 6 blocks of £20K in that tax year, you can therefore put £100-£120K back. It doesn't seem to realise that the total withdrawls are the same £20K being re-used over and over again! 🙃

gopalgriffith

https://forums.moneysavingexpert.com/discussion/comment/82150344#Comment_82150344

Clearly the £100k would have had to be built up over a number of years. But if someone happened to have already built up that much in an ISA, this might be a more efficient option (compared to multiple tranches) - especially where one's SAYE provider doesn't allow partial transfers.

It never occurred to me that it would be anything other than option 3.

I think AJBell at least would second that thought based on their note about transfers from SAYE to ISA where they talk about needing to check if you have enough of this years ISA allowance left (that wouldn't be relevant to option 1)

How do I make a SAYE or SIP transfer into AJ Bell? | AJ Bell

Of course I don't know what EQI say about it

AJ Bell don't offer a flexible ISA - so in their case, you would only ever be able to use up the current year's ISA allowance - so the above webpage makes sense for a non-flexible ISA.

Ultimately, this is going to boil down to whether it is possible to replenish withdrawn Flexible ISA cash with one or more in-specie transfers from SAYE. It is clear that up to £20k can be transferred counting as using the current year's allowance. The question is then whether one can transfer further SAYE holdings against "withdrawn" cash from a flexible ISA. Equiniti are the only provider that seems to state this is possible. And if it is possible, it shouldn't matter whether it is one large transfer using withdrawn cash across multiple year allowance or a series of £20k tranches against the current year allowance.

gopalgriffith

https://forums.moneysavingexpert.com/discussion/comment/82150375#Comment_82150375

On the SIPP point, you could always then add in the cash you have put through the Flexible ISA process into your SIPP and gain the further tax relief. Of course, this would depend on limits on ISA contributions (£60k or annual salary). But by using the flexible ISA route, you can then feed into your SIPP over time to stay within annual limits.

And whilst there are a number of ISA providers who allow in-specie transfers to an ISA, I am yet to find a SIPP provider who unequivocally allow such a transfer - Hargreaves Lansdowne do talk about SAYE to SIPP transfers, but they seem to run it first through a GIA account, and they note that CGT may become payable (which kind of defeats the object of the exercise).