Sharesave, CGT and Stocks & Shares ISA

I’ve got a Sharesave scheme maturing soon and am fortunate enough that it looks like it will gain more than £3000, so Capital Gains Tax will be due on the gains over the threshold.

Apparently I could transfer some shares to my wife, then she could use her CGT allowance too. Alternatively, I could transfer the shares into a Stocks and Shares ISA, then sell the shares and have no CGT to pay?

What I’m not clear on at all is the details of this. How would I transfer the shares to my wife? How exactly would shares be transferred into a Stocks and Shares ISA? I’ve seen talk of the shares not actually being transferred but sold then re-bought in through the ISA…. which then leads me onto thinking, could I buy other shares instead?

Overall I’m looking to exercise all options and sell all shares, while minimising tax liability.

Anyone got any advice on this?

My wife was in a similar position – her company gave advice as to how to reduce the tax impact.  There was something or other about a transferring into a trust which sounded iffy, but its a well respected company so I’m sure it was all correct.

Her plan matured at the end of the calendar year, so we sold the max amount prior to tax year end, and the remainder in the following tax year and paid no CGT

Hmmm. I was about to start a thread on pretty much this, but with an added complication ( exceeding the £20k annual ISA allowance)

Apparently I could transfer some shares to my wife, then she could use her CGT allowance too.

Hmm. I’ve never heard of this. Sounds a bit Shawshank Redemption!  But then I’m not married so may have just missed it

Alternatively, I could transfer the shares into a Stocks and Shares ISA, then sell the shares and have no CGT to pay?

Yes, exactly this.  I will be doing exactly that when mine mature next year. Based on current prices I have the [ frankly ridiculous] added issue that I can only transfer a proportion into my ISA in 2025.

My option becomes available in Nov 2025. I then need to hold fire until January before I respond to say I will take the shares.

I then withdraw about £4.5k worth to cash, keeping me just under the £3k limit

Then transfer £20k to my ISA. And sell them immediately CGT free.

Then wait until April 2026 and sell another £4.5k to cash

And then also in April transfer the balance to my ISA, and again sell most of them to reduce my EggsInOneBasket exposure. Note that this 2026 ISA transfer needs to be done within 90 days of accepting the stock option, which is why I need to hang fire from being granted in November, and opting in January. If I opt in November then the 90 days expire before I get my 26/27 ISA allowance.

How exactly would shares be transferred into a Stocks and Shares ISA?

Speak to the company that manages the options, and your ISA provider. Mine is online. I plan to do a test transfer from my Sharepurchase soon just to ensure it all works as expected

I’ve seen talk of the shares not actually being transferred but sold then re-bought in through the ISA…. which then leads me onto thinking, could I buy other shares instead?

I think the sell and rebuy is slightly different.

Overall I’m looking to exercise all options and sell all shares, while minimising tax liability.

True

There is talk from colleagues that if you buy and sell immediately, there is no CGT due.

CGT would only be applicable if you buy the options, hold them, and then they go up in value. The CGT would be due on the gain if more than £3k….. I’m not 100% sure on this

EDIT: they aren’t sure now too!

CGT would only be applicable if you buy the options, hold them, and then they go up in value

I don’t agree. ( And spent a good thirty minutes on the phone discussing it with Morgan Stanley dude to be sure )

I don’t agree

Yeah, I’m with you.

It depends. I get awarded shares every year that vest (“become mine”) quarterly over a few years. Each quarter as they vest they are taxed as income – so £1000 worth vesting means I have to pay income tax on that amount, which is paid by some of the shares being sold.

Those shares that are now vested – i.e. mine – sit in a broker account. If they go up and I sell, that gain counts as capital gains.

You can definitely transfer between spouses to use both allowances.

The transfer is just a gift which has no tax liability between spouses. She inherits the original price (not market price on date of transfer) and has the CGT liability when she sells, but has her own (modest) allowance to use up before paying tax.

As for masking the gain by transferring into an ISA immediately prior to sale, I’m sceptical, but it’s not something I’ve looked into. I’d expect this to be treated as a disposal and repurchase (with tax paid on the gain on disposal).

@beej

Those shares are different because they are part of your remuneration. So if you sell immediately on exercising the option, then there’s just income tax to pay, no CGT. You’re right though, if you exercise and hold the shares, you first pay income tax on them. Then if you sell later and there are gains over £3k you’ll have to pay CGT on the gain over £3k.

Sharesave is different because you are buying the shares with your own money (that’s already been taxed)

@thecaptain

As for masking the gain by transferring into an ISA immediately prior to sale, I’m sceptical, but it’s not something I’ve looked into. I’d expect this to be treated as a disposal and repurchase (with tax paid on the gain on disposal).

From here https://www.gov.uk/tax-employee-share-schemes/save-as-you-earn-saye

You’ll not pay Capital Gains Tax if you transfer the shares:

– to an Individual Savings Account (ISA) within 90 days of taking them out of the scheme

Which is easily said…. but then there’s things like this from Hargreaves Lansdown, https://www.hl.co.uk/investment-services/isa/frequently-asked-questions

Can I put shares that I already own into a HL Stocks & Shares ISA?

To move shares into a Stocks and Shares ISA, you’ll need to sell the shares in the Fund and Share Account and buy them back in the ISA. This is sometimes called a Bed and ISA.

HL’s share exchange service lets you do this. And there’s no charge for selling the shares as part of this service, only when buying them back.

Seems though that a Bed and ISA would make you liable for CGT on the gains

I have one maturing early next year and will be in a similar position.

The plan is to transfer them into a stocks and shares isa upon maturing and then sell them. I believe that you then pay no CGT.

The company have put on a webinar type thing in a weeks time to go over the options so hopefully the above will covered during that.

Those shares are different because they are part of your remuneration. So … …. on the gain over £3k.

Sharesave is different because …. been taxed)

Yeah, I’m with you 😉

As for masking the gain by transferring into an ISA immediately prior to sale, I’m sceptical, but it’s not something I’ve looked into. I’d expect this to be treated as a disposal and repurchase (with tax paid on the gain on disposal).

I’ll change the phraseology slightly

transferring into an ISA within 90 days of the share option bring exercised

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.

From..

https://www.gov.uk/tax-employee-share-schemes/transferring-your-shares-to-an-isa#:~:text=Your%20ISA%20provider%20must%20agree,your%20SIP%20or%20SAYE%20shares.

Edit. Too slow 🙂

Yes to the above. CGT not applicable if you transfer to an ISA within 90 days. I did this earlier this year, it was a bit close to the bone as I had to wait for the new financial year as my ISA 2023-2024 was maxed out so was necessary to wait 60ish days until April for 2024-2025 allowance.

Can anyone find a ISA that allows transfer of shares into it?

(Not Bed and ISA, i.e. sell then re-buy in ISA, I believe this will incur CGT)

Can anyone find a ISA that allows transfer of shares into it?

My AJBell and Interactive Investor both do. I checked with them last week and got all the necessary details

I just read this on Interactive Investor

https://www.ii.co.uk/ii-accounts/isa/faqs/can-you-transfer-shares-into-isa

If you’re looking to move shares into a Stocks & Shares ISA, you need to complete what’s known as a Bed and ISA transfer.

I believe the Bed part will incur CGT. You’re selling the shares for cash, then using that cash to re-buy the shares.

dmorts +1

I just read this on Interactive Investor

https://www.ii.co.uk/ii-accounts/isa/faqs/can-you-transfer-shares-into-isa

If you’re looking to move shares into a Stocks & Shares ISA, you need to complete what’s known as a Bed and ISA transfer.

I believe the Bed part will incur CGT. You’re selling the shares for cash, then using that cash to re-buy the shares.

All true. But you’re looking at the answer a different question. Or at least a different question to the subject of this thread, which is specifically about moving from a company Sharesave scheme.

Look further down that page and you see this:

Bed and ISA” is the name given to the process of transferring your shares from a general investment account (like a Trading Account) into an ISA.

Edit, sorry dmort. I realise you were answering your own question. And I don’t know if your question was intended about general transfers from investment accounts or Sharesave.  Can you confirm which?

Yes @thegeneralist I see that distinction now.

@thegeneralist

I’m looking for transfers of shares from SAYE into a Stocks and Shares ISA. It looks like there are ISA providers who allow this. I can see myself that AJ Bell and Interactive Investor allow it.

Initially, I was only seeing the option for Bed and ISA. However, as you’ve pointed out these are used for moving shares from Dealing/trading accounts into Stocks and Shares ISAs. They aren’t applicable for transferring SAYE shares into Stocks and Shares ISAs.
This is the clarification I was looking for https://www.ii.co.uk/help/transfers/making-a-transfer/employee-share-plans

Cool. Useful link. Wish I’d seen that last month!

The info at the bottom of that link does indeed tie in with what Morgan Stanley was asking for when I log into the work scheme and fill in a transfer request.

If I transfer some shares to my wife then she sells them is the gain/profit then 100% of the share value? If so then I would only transfer £3k worth of shares to stay under her CGT limit.

I’m not sure she could use a Stocks and Shares ISA in the same way I could