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TonyTax, Tax Consultant
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My Husband was earning 29,000 per year, but has been made redundant

Resolved Question:

My Husband was earning 29,000 per year, but has been made redundant in Dec 2014 he received he redundancy payment of 39,000 in Jan 2015, and has been forced to sell his SIP shares which he has received 14,538.88.
Dose he need to pay Capital gains tax, if so how much and when will he need to pay.
I've seen on the gov.uk website about gifting to spouse.
I unsure of what we need to do
Submitted: 2 years ago.
Category: Tax
Expert:  Alex J. replied 2 years ago.
Hi,
Thank you for your question and welcome.
My name is ***** ***** I will assist you.
Has the £39k been paid under a compromise agreement?
Kind regards
AJ
Customer: replied 2 years ago.

Hi,

Not sure what you mean by compromise agreement.

He worked for the company for 30 years. the company closed it's business, he was offered a job the other end of the country which he did not take so he took redundancy instead, the package included freezing his pension and selling his SIP shares.

He was not tax on the first 30k (redundancy rules) but was taxed on the other 9k.

His SIPS contribution was taken from his wages so he had already paid tax on this.

If he had worked to the end of tax year he would of earnt 29k (minus tax and insurance)

Regards

Nikki

Expert:  Nicola-mod replied 2 years ago.
Hello,
It seems the professional has left this conversation. This happens occasionally, and it's usually because the professional thinks that someone else might be a better match for your question. I've been working hard to find a new professional to assist you with your question, but sometimes finding the right professional can take a little longer than expected.
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Nicola
Customer: replied 2 years ago.

I am happy to continue to wait for an answer

Regards

Nikki

Expert:  Nicola-mod replied 2 years ago.
Hello,
We will continue to look for a Professional to assist you.
Thank you for your patience,
Nicola
Expert:  TonyTax replied 2 years ago.

Hi.

Assuming you are referring to a Share Incentive Plan (SIP), there will be no income tax or national insurance contributions to pay on any early withdrawal from the scheme as your husband is deemed to be a "good leaver" by reason of his redundancy.

As for Capital Gains Tax, the first £11,000 of gains made by an individual in any one tax year are exempt from CGT. If the shares are kept in the plan and they are sold within the plan, there will be no CGT to pay on any gain. If the shares are withdrawn from the plan and sold later, then a gain will be made if they are sold for more than what they were worth when they were withdrawn from the plan.

It seems to me that the shares in the SIP were sold within the SIP wrapper and, therefore, there should be no taxable gain. Your husband can check that with his former employer.

Take a look here, here, here and here for more information on SIPs.

I hope this helps but let me know if you have any further questions.

TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15942
Experience: Inc Tax, CGT, Corp Tax, IHT, VAT.
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