Selling shares - how much are we taxed?

[Posty7910]

Hello everyone, I'm new to this forum and just want to ask about selling shares in October.

I've checked page 8 of the shares booklet and see that they will be subject to income tax and national insurance the LOWER of either the value of free shares based on share price at the time we were given them or
Value of share price when we sell from the SIP.

What is share price at the time we were given them ? Is that the £3.30 per share govt sold them at?

So 395 shares X £3.30 = £1303 tax + nat ins £417.12??.

This sum would have to be subtracted from the current share value. Has anyone worked out rough figures? I understand they are not taxed if I wait until 5th year but would rather offload now if the share price holds up.

Cheers,

[mark02]

Worth 3k when we got them ,

[RobertT]

The share price when the first allocation was handed out was £4.89, so if the price is higher than that when you sell them, you still base the tax and NI reduction on £4.89.

The current price(14/8/16) is £5.16 so although your 395 shares are worth £2,038, you only pay tax on £1,931 which equates to £618. You will therefore get £1,420 in your pocket. Minus I think another £20 dealing costs.

[mark02]

So Robert what would full timers get ? 613 shares?

[RobertT]

So Robert what would full timers get ? 613 shares?

After tax and NI it would be £2,204. But with no deductions it would be £3,163. Minus dealing charges in both cases.

[Posty7910]

Thanks all . I understand now , more tax than I thought so will probably keep them till 5 years.

[Andy_07]

I've got 529 shares, If i cashed them in Robert what would be my amount ? Cheers.

[RobertT]

I've got 529 shares, If i cashed them in Robert what would be my amount ? Cheers.

You can only cash in the shares this October that you were allocated in October 2013. You’ll have to wait until April 2017 before you can cash in the second batch and October 2018 for the third tranche.

If your 529 shares relate to the first allocation, based on todays share price they’ll be worth £2,586 but tax and NI of £827 would be payable, so you’ll actually get £1,759, minus dealing charges.

Obviously the share price on the day you sell them will denote how much you actually get.

Or you could wait until at least 5 years have expired for each batch and sell them without paying tax or NI, and get a few more dividends on the way too.

[Andy_07]

I've got 529 shares, If i cashed them in Robert what would be my amount ? Cheers.

You can only cash in the shares this October that you were allocated in October 2013. You’ll have to wait until April 2017 before you can cash in the second batch and October 2018 for the third tranche.

If your 529 shares relate to the first allocation, based on todays share price they’ll be worth £2,586 but tax and NI of £827 would be payable, so you’ll actually get £1,759, minus dealing charges.

Obviously the share price on the day you sell them will denote how much you actually get.

Or you could wait until at least 5 years have expired for each batch and sell them without paying tax or NI, and get a few more dividends on the way too.

Brilliant Robert cheers for explaining that mate...Yeah i have 529 shares from the first allocation.

[meercat]

Hi Robert - sorry to bug you again but you seem to be the new Justin Urquhart Stewart round here so can you tell me this - is there a way to avoid the tax implications of selling these shares early?

Particularly thinking of anything off-shorey or corporate tax-avoidance scenario-like? If the big-boys can do it why can't we? Could a few hundred posties band together open a company and sell together to get a better deal?

[RobertT]

Hi Robert - sorry to bug you again but you seem to be the new Justin Urquhart Stewart round here so can you tell me this - is there a way to avoid the tax implications of selling these shares early?

Particularly thinking of anything off-shorey or corporate tax-avoidance scenario-like? If the big-boys can do it why can't we? Could a few hundred posties band together open a company and sell together to get a better deal?

Our shares are held in a SIP and unfortunately there is no way that I know of to avoid paying tax other than by waiting 5 years or by being a 'good leaver'.

Love the Justin Urquhart Stewart comment, it reminds me of when we could be finished and at home in good time to watch Working Lunch.

[rambo1]

Thanks all . I understand now , more tax than I thought so will probably keep them till 5 years.

An added bonus is you get another two yrs of divis as well, I don't think they'll be cutting it just yet but nothing is guaranteed of course when it comes to dividends.

[meercat]

Love the Justin Urquhart Stewart comment, it reminds me of when we could be finished and at home in good time to watch Working Lunch.

Yes great show! I'm picturing you wearing red Royal Mail braces and doing the rounds in your office giving out financial advice.

[RobertT]

Love the Justin Urquhart Stewart comment, it reminds me of when we could be finished and at home in good time to watch Working Lunch.

Yes great show! I'm picturing you wearing red Royal Mail braces and doing the rounds in your office giving out financial advice.

LOL

[foxyjarvis]

RobertT
Kudos for your knowledge and patience, holding so many posties hands here. Micky Clarke has made a career out of blagging it on Wake Up To Money on 5live and Working Lunch. The two of you should do a job swap.