Shares child tax credits

[TONY MELON]

Will selling my shares affect my child tax credits
Also will it show up on my total yearly salary p60

[jetblack]

Same question asked in another thread. I can't personally give you a definitive answer - but my best guess is that yes it will be counted as income for the tax year, therefore impacting upon your tax credits.
Had a similar carry on with a bonus/incentive payment about 6 years ago IIRC - I contacted TPTB to see if I could get it paid straight into my AVC to avoid the hit in both tax and tax credit, but to avail.

Maybe the shares (if you haven't already cashed them in) could be transferred to a SIPP. Or maybe if you have cashed them in you could use the money to pay into your RM AVC's or a SIPP, as money paid to a pension is deductible from income for WTC/CTC purposes. Kind of a workaround.

[mark.cup]

If this is the case anyone receiving tax credits would be mad to have sold 1st you pay tax and national insurance then when your P60 comes in your tax credits will get reduced as well...

Surprised how many desperate postman in my office have taken it for no other reason than they can and will blow it in 5 minutes!

I can understand if you were really skint or it would clear off something like credit card debt and save you interest

[wandle]

Someone in my office asked the same question: will it affect my Tax Credits?
So I used the calculator tool for him, on the government website, ( https://www.gov.uk/tax-credits-calculator" onclick="window.open(this.href);return false; ) putting in a estimate of his pre-tax earnings this year, and various other numbers it asks for. It suggested he would be entitled to about £393/month in Child Tax Credit.
I than ran the same calculator tool again, with a fictitious £3000 added to to the previous figure, for his pre-tax earnings. It came up with a new figure: entitled to about £298/month in Child Tax Credit.
So, if he sells his shares, he loses £959 in Tax/NI, and then loses £95/month for at least the next six months (and maybe some lesser figure next Financial Year, I'm guessing). That's potentially another £570 given away to HM Government

So, his overall gain, after loss of tax and loss of income from Tax Credits, would be £1471

3000
-959
-570
------
1471

That's like selling his 613 shares for the equivalent of 240p/share, well under half the market price

My advice to him was to HOLD the shares for 2 more years, then transfer them out of the SIP, into his name, then immediately gift them to his child. No sale proceeds = no income to declare on his tax return, therefore no reduction in Child Tax Credit in October 2018

[jetblack]

My advice to him was to HOLD the shares for 2 more years, then transfer them out of the SIP, into his name, then immediately gift them to his child. No sale proceeds = no income to declare on his tax return, therefore no reduction in Child Tax Credit in October 2018

Yep - good advice wandle - and I reckon this is a hit that will probably affect a lot of posties.

Just to pose a question - I wonder if its possible to transfer the shares directly from the sip to a childs (isa/child trust fund etc) account - thereby missing out the step whereby they are, albeit temporarily, held in our names ?

They should definitely make it an option to have them directly transferred to a pension. I think, as things stand, if you want to transfer them to a SIPP they have to be sold first, and then immediately transferred (bought into) the SIPP - it can't be done directly. I don't know what the potential implications of this are re. declared income.