When can you sell partnership and matching shares

thegreatestfreddy · Post by **thegreatestfreddy** » 05 Jul 2019, 21:06

When and under whatever circumstances are you allowed to sell your partnership and matching shares free off any income tax / national insurance payments ... ??

Post by **barrowc** » 06 Jul 2019, 00:38

If you still work for Royal Mail then, once you have held the partnership and matching shares for five years, you can take them out of the SIP (i.e. sell them or transfer them into your own name) free of tax and NICs. If you hold the shares for between three and five years then you will pay tax and NICs on the proceeds. If you hold them for less than three years, you forfeit the matching shares completely and pay tax and NICs on the partnership shares.

If you leave Royal Mail because of dismissal or resignation (although see the definition of retirement below) then the same tax rules apply as above.

If you leave Royal Mail because of redundancy, retirement (currently defined as "resignation aged 60 or over"), the part of RM you work for is sold or transferred, you have an injury/disability which means you can no longer do your job, or you die then there will be no tax or NICs payable on the shares no matter how long you have held them for.

All of the details can be found here

thegreatestfreddy · Post by **thegreatestfreddy** » 06 Jul 2019, 06:05

barrowc wrote:If you still work for Royal Mail then, once you have held the partnership and matching shares for five years, you can take them out of the SIP (i.e. sell them or transfer them into your own name) free of tax and NICs. If you hold the shares for between three and five years then you will pay tax and NICs on the proceeds. If you hold them for less than three years, you forfeit the matching shares completely and pay tax and NICs on the partnership shares.

If you leave Royal Mail because of dismissal or resignation (although see the definition of retirement below) then the same tax rules apply as above.

If you leave Royal Mail because of redundancy, retirement (currently defined as "resignation aged 60 or over"), the part of RM you work for is sold or transferred, you have an injury/disability which means you can no longer do your job, or you die then there will be no tax or NICs payable on the shares no matter how long you have held them for.

All of the details can be found here

Thanks ...
I take it if you semi retire aged over 60.... ie go from full time hours (5 days a week) to say part time (perhaps 3 days a week), that wouldn’t qualify for taking those shares tax and ni free.. ??

Post by **RobertT** » 06 Jul 2019, 12:27

thegreatestfreddy wrote:Thanks ...
I take it if you semi retire aged over 60.... ie go from full time hours (5 days a week) to say part time (perhaps 3 days a week), that wouldn’t qualify for taking those shares tax and ni free.. ??

No it wouldn't I'm afraid, you have to leave RM employment completely.

Post by **wacko74** » 06 Jul 2019, 16:30

It seems stupid that we're forced to pay tax and NI on them if we do leave before the 5 years, why can't we have the option to just leave them sat in the sip untouched for the full 5 year period even if we have left?

Post by **RobertT** » 06 Jul 2019, 16:55

You can argue that we could have that option, but ultimately that's not in the SIP rules, and everyone who's signed up for P&M presumably read their booklet and knows the rules beforehand.

I chose not to buy via P&M for that very reason, as I plan to leave before 60 and before any shares I had bought reach their 5 year anniversary.

Post by **wacko74** » 06 Jul 2019, 17:51

I was aware of the 5 year rule and I will be staying on for 5 years (but hopefully not much longer than that!)

Just commenting that I can't see why there isn't the option for someone to just leave them in there if they do leave.

thegreatestfreddy · Post by **thegreatestfreddy** » 06 Jul 2019, 18:18

wacko74 wrote:I was aware of the 5 year rule and I will be staying on for 5 years (but hopefully not much longer than that!)

Just commenting that I can't see why there isn't the option for someone to just leave them in there if they do leave.

I’m just over 60 and plan to do no more than 2 or 3 years possibly going part time though...

As you say, upon leaving it is a shame they can’t just be left to cash in at some stage into the future during retirement when we choose

Post by **RobertT** » 06 Jul 2019, 18:46

thegreatestfreddy wrote:
wacko74 wrote:I was aware of the 5 year rule and I will be staying on for 5 years (but hopefully not much longer than that!)

Just commenting that I can't see why there isn't the option for someone to just leave them in there if they do leave.
I’m just over 60 and plan to do no more than 2 or 3 years possibly going part time though...

As you say, upon leaving it is a shame they can’t just be left to cash in at some stage into the future during retirement when we choose

You can keep them after you've left RM, just not in the SIP.
And as long as you're over 60 or held each batch for 5 years they will be tax and NIC's free.

k979aaa · Post by **k979aaa** » 06 Jul 2019, 20:05

RobertT wrote:
thegreatestfreddy wrote:
wacko74 wrote:I was aware of the 5 year rule and I will be staying on for 5 years (but hopefully not much longer than that!)

Just commenting that I can't see why there isn't the option for someone to just leave them in there if they do leave.
I’m just over 60 and plan to do no more than 2 or 3 years possibly going part time though...

As you say, upon leaving it is a shame they can’t just be left to cash in at some stage into the future during retirement when we choose
You can keep them after you've left RM, just not in the SIP.
And as long as you're over 60 or held each batch for 5 years they will be tax and NIC's free.

Is Rico Back over 60 guess he made a tax free killing at our expense then?

thegreatestfreddy · Post by **thegreatestfreddy** » 06 Jul 2019, 20:06

RobertT wrote:
thegreatestfreddy wrote:
wacko74 wrote:I was aware of the 5 year rule and I will be staying on for 5 years (but hopefully not much longer than that!)

Just commenting that I can't see why there isn't the option for someone to just leave them in there if they do leave.
I’m just over 60 and plan to do no more than 2 or 3 years possibly going part time though...

As you say, upon leaving it is a shame they can’t just be left to cash in at some stage into the future during retirement when we choose
You can keep them after you've left RM, just not in the SIP.
And as long as you're over 60 or held each batch for 5 years they will be tax and NIC's free.

Oh ... that sounds beneficial to be able to hang on to them ...

Would they have to be moved into the CSN section of the Equinti portfolio or would they be required to be moved into some other dedicated section of the portfolio upon leaving the company (at age 60+)...??

Thanks again Robert for your help and knowledge in these matters ..
Regards,
Freddy

Post by **RobertT** » 07 Jul 2019, 18:19

There may be someone who has personal knowledge of this, but I think the Corporate Sponsored Nominee account with Equiniti would be an option, as is a share account or ISA either with Equiniti or another platform of your choice.