However, these shares are often gifted or bought through salary sacrifice and are rarely held in tax-efficient wrappers such as pensions or Isas. When sales do come about, they incur CGT if outside of the seller’s annual allowance.
There is a process of transferring investments held out of an Isa into one, called Bed and Isa. However, this technical process is essentially where your Isa buys the investments from your trading account. As this is still classed as a sale, it will incur CGT on any profits above the seller's allowance.
Basic-rate taxpayers pay a 10pc CGT rate while higher-rate taxpayers pay 20pc.
Craig Rickman, of consultancy The Langcat, said the first thing to do is to take advantage of tax allowances. “CGT charged on the disposal of shares can take a sizeable bite out of proceeds. But, fortunately, there are ways to achieve a lower tax bill.
“Every resident of Britain is allowed to realise £12,000 of capital gains each tax year without incurring a capital gains charge. Any further withdrawals can be postponed until a new tax year starts – April 6 – as everyone gets a new annual exemption.
“The sale proceeds can then be used to top up an Isa and shield any future growth from tax.”
M三级成人视频r Rickman said there were steps to get an even larger allowance. “Assets can be transferred between spouses without incurring CGT,” he said.
“Therefore, £12,000 worth of capital gains could be switched into a spouse’s name三级成人视频 to make use of their annual £12,000 allowance.
“The sale proceeds could then fund individual Isas, as the combined Isa annual allowance is £40,000 – £20,000 each.”
This should more than cover the immediate need to sell down £30,000 worth of shares. However, given more shares are being bought and gifted, it could be wise to do some future planning around the investments.
It would be worth looking into whether any shares can be taken out of the employee’s name and put in a spouse's name.
Not only does that mean taking advantage of their annual allowance, but also, if they are a basic-rate taxpayer they will pay lower CGT on anything sold outside of allowances, and they will incur lower dividend tax rates.