Vested Stock - how to transfer to an ISA
Discussion
Morning All,
Looking for some (hopefully simple) advice.
As an employee at a US Tech firm, my first set of Restricted Stock Options have now vested, and I would like to transfer these to my ISA.
The issue I have is my ISA provider (Fidelity) only has a limited number of stocks they are willing to hold in an ISA, and my company stocks are not one of them.
Does anyone know of an ISA provider that has a wider range of stocks they are willing to hold? for reference, and not to give the game away the stocks are blue chip / top 3 largest company globally.
Anyone got any good suggestions?
Thanks!
Looking for some (hopefully simple) advice.
As an employee at a US Tech firm, my first set of Restricted Stock Options have now vested, and I would like to transfer these to my ISA.
The issue I have is my ISA provider (Fidelity) only has a limited number of stocks they are willing to hold in an ISA, and my company stocks are not one of them.
Does anyone know of an ISA provider that has a wider range of stocks they are willing to hold? for reference, and not to give the game away the stocks are blue chip / top 3 largest company globally.
Anyone got any good suggestions?
Thanks!
I have an S&S ISA with Hargreaves Lansdown with some Microsoft stock in it if that helps.
There is some additional form you have to complete for US stocks, but the HL website takes you through it.
There is some additional form you have to complete for US stocks, but the HL website takes you through it.
theaxe said:
I have an S&S ISA with Hargreaves Lansdown with some Microsoft stock in it if that helps.
There is some additional form you have to complete for US stocks, but the HL website takes you through it.
Thank you There is some additional form you have to complete for US stocks, but the HL website takes you through it.
IIRC it's not possible to "transfer" anything into an ISA. You have to sell the stock for cash, invest the cash into an ISA and then use that cash to buy fresh stock in the ISA. (It's known as "bed and ISA". People like HL can usually do it for you.)
Two points arise,
Two points arise,
- Sale of the stock is a disposal for CGT purposes and will trigger a taxable gain (unless you are using the £11,700 annual allowance). Any taxable gain for CGT purposes will depend on the base price at which stock vested with you.
- Once you've sold the stock do you really want to buy the same thing back again or would you prefer to buy a more diversified investment in the ISA?
rockin said:
Once you've sold the stock do you really want to buy the same thing back again or would you prefer to buy a more diversified investment in the ISA?
This is a really good point. I am in a similar situation with my employer and I always sell vested shares and invest to diversify. You are already really exposed to your employer through your job, why would you double down on that in your savings.
Presumably you also count as a company insider, so you are only allowed to sell during open periods. That would be a pain if you needed the liquidity to buy a house or whatever.
I am at exactly the point to which rockin refers, as I am about to sell some USA stocks and put the proceeds into an ISA. It is a shame I cannot simply transfer the shares without selling them and incurring a potential CGT liability. Actually, I'm selling only a sufficient tranche of shares so that there is no CGT or liability to report the sale of shares in my next self assessment.
Note that the calculation of the CGT allows you to take into account the cost of purchase of the shares including the things like any withholding tax, dealing expenses etc, and also the same when selling the shares, before you get to the net cost of the trade. Then deduct this net cost from the proceeds of the sale and you get the capital gain so you can see if there's any liability for CGT. Plenty about this plus examples on HMRC's website.
Something else to consider doing is to gift shares to your wife which is entirely free of any taxes, charges etc, so she can then trade the shares, and compute any CGT liability in respect of the shares she owns, into an ISA of her own. In effect the two of you can do two separate transactions rather than the one that you can do. And as it's near the end of the current tax year you can do this very soon and then repeat the process shortly after the next tax year begins.
R
Note that the calculation of the CGT allows you to take into account the cost of purchase of the shares including the things like any withholding tax, dealing expenses etc, and also the same when selling the shares, before you get to the net cost of the trade. Then deduct this net cost from the proceeds of the sale and you get the capital gain so you can see if there's any liability for CGT. Plenty about this plus examples on HMRC's website.
Something else to consider doing is to gift shares to your wife which is entirely free of any taxes, charges etc, so she can then trade the shares, and compute any CGT liability in respect of the shares she owns, into an ISA of her own. In effect the two of you can do two separate transactions rather than the one that you can do. And as it's near the end of the current tax year you can do this very soon and then repeat the process shortly after the next tax year begins.
R
I am also in a similar position and the diversification issue is an interesting one.
You can imagine that for a well established company like Microsoft or Oracle then there isn't generally a great deal of movement on the stock price, and so the diversification seems to make sense.
However, I work for a recently IPO'd unicorn where there is currently 50% growth and so there is potentially a large gain to be had, although clearly still risk and concern about being over exposed.
Certainly for the next tax year I have some "interesting" decisions to make in respect of having to pay a considerable tax bill, needing to make a large pension contribution to keep my basic allowance but yet wanting to keep the stock for the gains.
A lot of food for thought
You can imagine that for a well established company like Microsoft or Oracle then there isn't generally a great deal of movement on the stock price, and so the diversification seems to make sense.
However, I work for a recently IPO'd unicorn where there is currently 50% growth and so there is potentially a large gain to be had, although clearly still risk and concern about being over exposed.
Certainly for the next tax year I have some "interesting" decisions to make in respect of having to pay a considerable tax bill, needing to make a large pension contribution to keep my basic allowance but yet wanting to keep the stock for the gains.
A lot of food for thought
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