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CGT question- shares received from employer

Practical Issues
Velodrome
Posts: 2
Joined: September 10th, 2020, 2:31 pm

CGT question- shares received from employer

#339474

Postby Velodrome » September 10th, 2020, 2:45 pm

Hello
I would be grateful if someone would be kind enough to advise me on the CGT situation, with regard to shares acquired, from my former employer, as annual bonus. I have the original documentation, which states that there would be no income tax to pay, if held for 2 years.

I was given 275 shares, in May 1997 and 150 more in May 1998. The Total Initial Market Values being quoted as £5050 and £3730 respectively.

The 425 shares are now worth £35400 approx.

I had had the thought of selling sufficient shares to represent a £12000 gain. And then doing the same, in the next tax year.

But I don't know whether the two tranches of shares are to be treated separately, or whether all are assumed to have the same amount of capital gain. If the former, were I to sell only part of the holding, then which shares would be regarded as having been sold first?

I have tried looking into this on the HMRC website, but I read that, with shares allocated prior to 2000, it was necessary to consult a particular Tax Manual (which seems at present to be under revision and therefore not available)

I would appreciate any advice on this that people were able to offer me. Many thanks

Alaric
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Re: CGT question- shares received from employer

#339476

Postby Alaric » September 10th, 2020, 2:58 pm

Velodrome wrote:I was given 275 shares, in May 1997 and 150 more in May 1998. The Total Initial Market Values being quoted as £5050 and £3730 respectively.

The 425 shares are now worth £35400 approx.


As far as I am aware, you are treated as owning 425 shares with a purchase cost of £ 8780.

If you sold the lot your gain would be £26620 implying that you would need to sell a bit under half to stay within the annual CGT limit.The implication is that you still have two separate certificates. If however you put them into nominee form by using one of the many online Brokers, normal practice would amalgamate into one holding.

scrumpyjack
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Re: CGT question- shares received from employer

#339493

Postby scrumpyjack » September 10th, 2020, 3:41 pm

You need to identify exactly what rules apply to your particular employee share scheme.

Per HMRC there are various sorts of scheme and some you only pay CGT on gains exceeding a cumulative £100,000

https://www.gov.uk/tax-employee-share-s ... der-shares

I am not an expert at all on this but the normal rules on capital gains probably do not apply

Velodrome
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Joined: September 10th, 2020, 2:31 pm

Re: CGT question- shares received from employer

#340388

Postby Velodrome » September 15th, 2020, 11:08 am

thanks guys


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