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bigduckontax, Accountant
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What is the most tax efficient way to sell US shares and stock

Customer Question

What is the most tax efficient way to sell US shares and stock options that are currently held in a company scheme to minimise both US and UK tax (I am a higher rate tax payer)
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.

However, before I can answer I do need a little more information. Could you please expand upon what you mean by a 'company scheme?'
Customer: replied 3 years ago.

Hi Keith, I work for General Electric they have a share scheme where we buy one share and the company buy one (an employee spend of up to £125 per month of publically available stock). The employee bought shares have to be kept for 3 years, company bought for 5 years within the scheme. When they are sold the money comes back through my pay slip and hence it is taxed. I'm looking to find out whether it is more tax efficient (as an example) to transfer them out of the company scheme to a personal account or to my wife, and whether this enable me to utilise capital gains or other method to minimise tax. Let me know whether you need any other information.Thanks Garry

Expert:  bigduckontax replied 3 years ago.

Right Garry Please give me a few moments to do some research.

 

My colleagues advise me that as you suffered tax and national insurance on purchase as is normal no capital gains tax is due on sale. You don't get taxed on the same emolument. Assuming you stay within the disposal time rules there is no point in transferring them at all. Indeed, to do so could put the recipients into an unexpected capital gains tax position when they ultimately dispose of the shares..

Expert:  bigduckontax replied 3 years ago.
The answer to you question is included in my last information request. I am just clearing my Just Answer item.
Customer: replied 3 years ago.


Hi Keith, I'm sure I get UK tax relief when I purchase the shares though ? Could you confirm that your answer applies to the UK Tax system. Thanks

Expert:  bigduckontax replied 3 years ago.

Yes, it's the UK tax rules I was quoting. I am assuming of course that the share scheme is an approved one. I have to warn you, however, that if you keep the shares after you take them out of the plan you may have to pay Capital Gains Tax on the difference between the net sales price and the price of the share when you took them out of the plan.

bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 3 years ago.
Thank you for your support.

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