Company Sharesave Schemes - Tax question

[Ecosseven]

I currently pay into a company sharesave scheme. I understand that the maximum the government will allow me to save under sharesave schemes such as this is £250 a month. At the end of 3 years I can purchase the shares at an agreed price or simply take the money (+interest).

If I decide to take the shares how long do I have to hold these before selling to avoid paying tax on any profit?

Thanks.

[Eric Mc]

Will you be making a profit greater than £10,600?

[Ecosseven]

Eric Mc said:

Will you be making a profit greater than £10,600?

Unlikely.

I currently contribute £100 a month but the company I work for runs the same scheme every year so the plan is to invest £75/month next year and the same the year after that. This will mean that I have share options maturing every year after 3 years.

I was under the impression that I would pay at least some tax even if I was under the CGT threshold?

[Eric Mc]

If it's deemed to be a CGT matter, then as long as all your Capital Gains in the tax year are less than £10,600 in total, there will be no CGT to pay in that tax year.

If the disposal is deemed to generate "Income" rather than a "Capital Gain", then it would be subject to Income Tax (and possibly NI) rather than Capital Gains Tax and you would pay Income Tax at whatever your top rate of Income Tax happens to be in the tax year in which the income is generated.

[Ecosseven]

Eric Mc said:

If it's deemed to be a CGT matter, then as long as all your Capital Gains in the tax year are less than £10,600 in total, there will be no CGT to pay in that tax year.

If the disposal is deemed to generate "Income" rather than a "Capital Gain", then it would be subject to Income Tax (and possibly NI) rather than Capital Gains Tax and you would pay Income Tax at whatever your top rate of Income Tax happens to be in the tax year in which the income is generated.

Thanks Eric

[davethebunny]

our intranet for our shavesave scheme links to this:

http://www.hmrc.gov.uk/manuals/essum/essum30000.ht...

the FAQ says this:

Will I pay tax when I sell my shares?
SAYE is an approved scheme with HMRC and therefore any
gain you make on the sale of your shares may be subject
to Capital Gains Tax. Every person has an allowance each
year which means you are able to make a certain amount of
Capital Gains each year without paying tax.
If you have any doubts about your tax position you will
need to take advice from a professional tax advisor or
contact your local tax office. The references given in this
guide are for guidance only.



So i guess it depend on whether it's an approved SAYE scheme

Edited by davethebunny on Thursday 26th January 13:06

[Eric Mc]

davethebunny said:

our intranet for our shavesave scheme links to this:

http://www.hmrc.gov.uk/manuals/essum/essum30000.ht...

That will take about a week to read.

Shows how complex this whole area can be.