Saye & cgt

Tiptop79 · 21 November 2019 at 11:49AM

Hi All,

After 3 very long years, I can now cash in my shares as the scheme has matured.

I have looked at various examples on the Gov website and don't really understand it.

Can anyone help?

I am a single person and a higher rate taxpayer. I invested £18,000 into my SAYE scheme and now hold 583 shares worth $137 per share (£105). I did work for a UK company, we got bought out by a US company so they are now listed on NYSE .

I don't have any other investments/properties etc.

Value in GBP is approx £61k How many shares can I cash in now without paying CGT?

Thank you all.

jimmo · 21 November 2019 at 11:21PM

In 2019/20 you can realise a capital gain of £12,000 without paying tax.
If 583 shares will realise a gain of £43,000
Then 162 shares will realise a gain of £11,948.
As a higher rate taxpayer any gains over £12,000 will be charged at 20%.
https://www.gov.uk/hmrc-internal-manuals/self-assessment-manual/sam1010

p00hsticks · 22 November 2019 at 12:13AM

According to this you can transfer £20,000 worth from an SAYE scheme directly into an ISA as long as it's done within 90 days of the scheme maturing (and assuming that you've not already used your ISA allowance for this year). There's no CGT due on the transfer in, and you could then withdraw the money from the ISA tax free if that's what you wanted

https://www.gov.uk/tax-employee-share-schemes/transferring-your-shares-to-an-isa

Tiptop79 · 22 November 2019 at 3:43PM

Hi Jimmo,

Thanks for the link to the page.

I'm still a little clueless, is my initial investment still classed as a gain even though I have paid tax on the £18k from my salary?

Am I wrong in thinking I take out £18,000 plus another £12,000 on top as this keeps it under the taxable amount?

If I sold the equivalent of £30,000 worth of shares - would I have to pay CGT on that?

Thank you so much.

jimmo · 23 November 2019 at 12:27AM

No your £18,000 initial investment is not classed as a gain.
Yes you are wrong in thinking you take out £18,000 plus another £12,000 on top as this keeps it under the taxable amount.

Bear in mind that I am using your figures:
You have said that 583 shares have cost you £18,000.
You have said that they are now worth £61,000.
I have said that if you sold all 583 shares you would realise a gain of ( 61,000 - 18,000) £43,000.
I do realise that we all have different numeracy skills but I am really struggling to understand how you can ask if your initial investment is classed as a gain.
Moving on:
Your initial investment of £18,000 bought you 583 shares so each share cost you ( 18,000 / 583) £30.87.
When you come to sell your shares if you sell 1 share its initial cost will have been £30.87 and if you sell for £105 you will realise a gain of (105 - 30.87) £74.13.
If you sell 10 shares their initial cost will have been £308.70 and if you sell for £1050 you will realise a gain of (1050 - 308.70) £741.30.
And so on.
Does that make sense?

Tiptop79 · 25 November 2019 at 1:15PM

:j

jimmo wrote: »

No your £18,000 initial investment is not classed as a gain.
Yes you are wrong in thinking you take out £18,000 plus another £12,000 on top as this keeps it under the taxable amount.

Bear in mind that I am using your figures:
You have said that 583 shares have cost you £18,000.
You have said that they are now worth £61,000.
I have said that if you sold all 583 shares you would realise a gain of ( 61,000 - 18,000) £43,000.
I do realise that we all have different numeracy skills but I am really struggling to understand how you can ask if your initial investment is classed as a gain.
Moving on:
Your initial investment of £18,000 bought you 583 shares so each share cost you ( 18,000 / 583) £30.87.
When you come to sell your shares if you sell 1 share its initial cost will have been £30.87 and if you sell for £105 you will realise a gain of (105 - 30.87) £74.13.
If you sell 10 shares their initial cost will have been £308.70 and if you sell for £1050 you will realise a gain of (1050 - 308.70) £741.30.
And so on.
Does that make sense?

Indeed it does! Thank you so much for your patience with me and taking the time to explain it. I really do appreciate it. :j

Duran123 · 25 November 2019 at 8:00PM

Hi,

I'm in the exact same boat here and I've also been looking into on how I can make use of two tax windows (2019/20 and 2020/21) to cash in my shares without having to pay any capital gains tax.

As Jimmo has rightly pointed out, you can sell 162 shares without having to pay any capital gains tax as the gain is under £12k (based on share price at $137/£105). In addition to this you can directly transfer up to £20,000 worth of shares into an ISA. I.e. £20,000/£105 , i.e. 190 shares. Anything held in an ISA you can cash out immediately or invest in something else if you wanted to and is not subject to capital gains tax.

This means that 352 (162 + 190) of your shares you can cash out via the above in this tax year leaving you with 231 shares for tax year 2020/21.

In the next tax year (after April 5 2020), you can again sell 162 shares, leaving you now with 69 shares.

This is how far I have got. What I don't seem to understand is from what date does the "transfer directly into an ISA within 90 days" apply from?

Some places I have read this is from the maturity date of the scheme, in my case is 1st December, some say it is from when you exercise your option which can be delayed for up to 6 months from the maturity date.

Can someone please advise? Would this differ based on what scheme you are with?

Thanks

Saye & cgt

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