Transferring - nominee account

[attractioninvestor]

Hello All,

I have just been speaking to my online broker regarding transferring in VCT share certificates, which are about to com up on 5 years. Seems they do not lodge the original share purchase dates, rather log them with the transfer in date. I am assuming you just take care of this yourself and only sell the same number of share issued as they roll past the 5 years? However I have also seen comments regarding people only transferring once the 5 years has elapsed is the safest to ensure compliance.

Any thoughts?

Thanks

JC

[UncleEbenezer]

I have some VCTs held in a HL Vantage account, most of them transferred in within five years of new.

Transferring in wasn't an issue: they're happy to accept them, and there's no charge. The change to the shareholder register isn't a problem for the taxman (at least when NOT transferring into a tax shelter). Yes, you do lose the history: you need to keep track of purchase dates yourself. And for the purposes of profits/losses shown on the account, they set a nominal purchase price based on the date you transfer in - though you also have a period in which you can change that manually (for example, set it to what you originally paid) if that matters to you (note that it's not relevant to the taxman).

Dividends get paid into the nominee account of course. What happens to them thereafter is of course up to you: take the income or reinvest it.

[Blagdon]

only sell the same number of share issued as they roll past the 5 years?

If by this you mean sell batches of different VCT shares -- then yes

However, if you mean sell batches of the same VCT share bought new at different times -- then I think it is no as I think sales are LIFO and you could forfeit the upfront tax relief -- but happy to be corrected if I am wrong

[rhowitt]

Possilility of the violation of the 5 year worries me with regard to LIFO. I assumed that if I transferred vct shares older than 5 years into a nominee account but retained newer shares in the same VCT held directly, I would be OK selling the nominee account shares without loss of tax relief. Is that assumption wrong?

[127tolmers]

Hi Blagdon, I think you are wrong. Philip Hare at the ProVen event yesterday made it quite clear that for VCTs FIFO applies.

[james188]

Completely agree. It is definitely FIFO. It would be a huge disincentive on people topping up holdings if not and DRIS would be unattractive as a corollary.The complete opposite of what Governments of all persuasions have sought to achieve.

[moorfield]

Wondering if anyone has transferred their VCT certificates into an ISA account with their broker (eg. Hargreaves Lansdown or AJ Bell)?

Why would I want to do this?

Well I am unlikely to fill up my ISA allowance this year and may look to sell the VCTs I have within the next 2-3 years as they roll out of the 5 year holding period, at which time the cash proceeds of would then already be inside the ISA wrapper for onward recycling into HYPish shares (and since I have held them I have already been recycling dividends into the ISA anyway). Also I am a skinflint and don't want to incur duplicate custody charges, which I already pay on the ISA, parking them in an unsheltered "dealing" account. I am assuming the ISA contribution would be taken as the market value of the shares at time of transfer?

I will of course consult my broker on this too ...

[Kidman]

Wondering if anyone has transferred their VCT certificates into an ISA account with their broker (eg. Hargreaves Lansdown or AJ Bell)?

I suspect your plan is flawed.
One cannot transfer shares into an ISA in specie except in certain special cases such as after a demutualisation or some staff shares.
Hence one has to sell outwith the ISA and buy-back within the ISA so the sale negates the five year tax relief.

I wait until after the five year time and then use the HL 'Bed and ISA' to effect a free of charge sale and then a credit of the proceeds into my iSA.

[UncleEbenezer]

I've asked the same before now. I'm not entirely clear on the answer, but I think it would count as a sale and repurchase for tax purposes, so something to avoid if they're subject to tax shackles.

Friend of mine (if I've understood him correctly) holds some VCT shares in his SIPP. But he bought those on the secondary market.

I may be transferring some VCT shares into the ISA this year, for similar reasons to you. But if so, they'll be shares I could also sell outright without penalty.

[scotia]

I wait until after the five year time and then use the HL 'Bed and ISA' to effect a free of charge sale and then a credit of the proceeds into my iSA.

And I now do the same.