Is a stocks and shares ISA the right thing in this scenario?
Discussion
I have some share options maturing this year (SAYE), I think it will come in under £20k in terms of the value of the shares, but the profit on them will mean I have to pay tax, which I would prefer to avoid. I don't need the money for anything right away.
Should I just transfer the shares into a stocks and shares ISA? I understand that I would not need to pay tax then? If I decide to sell the shares in say 3 years, I still won't need to pay tax?
If this is the right option, any recommendations for which company to use? Or is there another way to solve this?
Should I just transfer the shares into a stocks and shares ISA? I understand that I would not need to pay tax then? If I decide to sell the shares in say 3 years, I still won't need to pay tax?
If this is the right option, any recommendations for which company to use? Or is there another way to solve this?
The shares are currently NOT in an ISA, so you'll have to sell them and pay any CGT tax due, to then buy them back inside an ISA. Any further gains inside the ISA when you next sell them are tax free.
You could make a gain of £6k this tax year without incurring any CGT charge and £3k next tax year. So before April 5th sell only the number of shares that make you a £6k profit, put that cash into this years ISA allowance and buyback the shares. Then sell the rest next tax year and use next tax years ISA Allowance.
Sorry edit: did a google search, special rules aroudn SAYE shares, see link on how to get them into ISA before selling: https://www.gov.uk/tax-employee-share-schemes/tran...
You could make a gain of £6k this tax year without incurring any CGT charge and £3k next tax year. So before April 5th sell only the number of shares that make you a £6k profit, put that cash into this years ISA allowance and buyback the shares. Then sell the rest next tax year and use next tax years ISA Allowance.
Sorry edit: did a google search, special rules aroudn SAYE shares, see link on how to get them into ISA before selling: https://www.gov.uk/tax-employee-share-schemes/tran...
Yes so:
You can transfer up to £20,000 of employee shares into a stocks and shares Individual Savings Account (ISA) if you have shares in a:
Save As You Earn (SAYE) scheme
Share Incentive Plan (SIP)
Your ISA provider must agree to the transfer.
You will not have to pay Capital Gains Tax on any gains you make on your shares if you move them to an ISA.
You must transfer your shares to your ISA within 90 days of when you took out your SIP or SAYE shares.
These shares will count towards your £20,000 ISA limit. They cannot be in addition to the limit.
Ask your employer or ISA provider for more information on how to transfer.
So assuming this is my best option, which provider would people recommend for a stocks and shares isa?
You can transfer up to £20,000 of employee shares into a stocks and shares Individual Savings Account (ISA) if you have shares in a:
Save As You Earn (SAYE) scheme
Share Incentive Plan (SIP)
Your ISA provider must agree to the transfer.
You will not have to pay Capital Gains Tax on any gains you make on your shares if you move them to an ISA.
You must transfer your shares to your ISA within 90 days of when you took out your SIP or SAYE shares.
These shares will count towards your £20,000 ISA limit. They cannot be in addition to the limit.
Ask your employer or ISA provider for more information on how to transfer.
So assuming this is my best option, which provider would people recommend for a stocks and shares isa?
I previously transferred from SIP/SAYE to ISAs with Hargreaves Lansdown and AJBell (other platforms are available), across different tax years.
If you don't need the cash you can consider transferring to a SIPP and receive a 25% tax relief top up on the value of shares transferred, provided you have enough earned income and haven't hit your annual allowance taking other pension contributions into account.
As already mentioned you need to transfer with 90 days of maturity.
If you don't need the cash you can consider transferring to a SIPP and receive a 25% tax relief top up on the value of shares transferred, provided you have enough earned income and haven't hit your annual allowance taking other pension contributions into account.
As already mentioned you need to transfer with 90 days of maturity.
MrSmith901 said:
Yes so:
You can transfer up to £20,000 of employee shares into a stocks and shares Individual Savings Account (ISA) if you have shares in a:
Save As You Earn (SAYE) scheme
Share Incentive Plan (SIP)
Your ISA provider must agree to the transfer.
You will not have to pay Capital Gains Tax on any gains you make on your shares if you move them to an ISA.
You must transfer your shares to your ISA within 90 days of when you took out your SIP or SAYE shares.
These shares will count towards your £20,000 ISA limit. They cannot be in addition to the limit.
Ask your employer or ISA provider for more information on how to transfer.
So assuming this is my best option, which provider would people recommend for a stocks and shares isa?
One that will accept a transfer from the SAYE provider, we used to use Equanti, as they had investment ISA, and ran the company SAYE and SIP (Equanti ISAs are EQI), seamless transfer. You can transfer up to £20,000 of employee shares into a stocks and shares Individual Savings Account (ISA) if you have shares in a:
Save As You Earn (SAYE) scheme
Share Incentive Plan (SIP)
Your ISA provider must agree to the transfer.
You will not have to pay Capital Gains Tax on any gains you make on your shares if you move them to an ISA.
You must transfer your shares to your ISA within 90 days of when you took out your SIP or SAYE shares.
These shares will count towards your £20,000 ISA limit. They cannot be in addition to the limit.
Ask your employer or ISA provider for more information on how to transfer.
So assuming this is my best option, which provider would people recommend for a stocks and shares isa?
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