Company share save scheme - tax query.

[Ecosseven]

Morning all,

I pay into a company share save scheme which has a term of three years. At the end of the three year period I can choose to either purchase shares a pre-determined price (let’s say £1 for the purpose of this example) or take the money I have paid into the scheme over the last three years.

If I choose to take the shares, which have increased in value by say 50% over the three year period, and sell them immediately what % of tax will I pay on these?

Thanks in advance.

[CaptainSensib1e]

You make a gain (profit) of up to £10,600 each tax year without having to pay tax. If you're in this fortunate postion you cna always split the sale of shares over a couple of tax years to keep under the threshold. If you do sell and make a gain in excess of your allowance, you'll pay 18% as a basic rate taxpaer, or 28% if you're a higher rate tax payer.

[Eric Mc]

There are quite complicated rules around these types of deals. You have to be careful that the disposal of the shares does not result in an Income Tax charge rather than a Capital Gains Tax charge.

[sumo69]

Eric Mc said:

There are quite complicated rules around these types of deals. You have to be careful that the disposal of the shares does not result in an Income Tax charge rather than a Capital Gains Tax charge.

There will ne no tax or NIC arising if the scheme is HMRC approved - is it?

If so, CGT is the only tax you need worry about which will be based on any profit made over and above the cost of the shares acquired - rates are given in the posts above.

David

[Eric Mc]

As I said - not all of these schemes are absolutely straightforward.

I know this because my wife was involved in such a scheme and had to be careful as to what date she chose to sell the shares.

Check.