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Ash, Solicitor
Category: Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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Hi there, I am a higher rate tax payer earning about £65k

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Hi there, I am a higher rate tax payer earning about £65k per year with a £10k bonus normally. This year my company floated and I received shares worth £126,000 (£3.15 each) I am not allowed to sell until next November. Currently I have decided next year to save 55% of my salary into my pension (feel higher relief will finish post election). This brings my salary down to approx £2k per month pus I make profit about £3k on a property let post deductions.

My question mainly is if I sell £40k worth of shares (assume £4.00 each) I assume my capital gains is the £1 per share growth and with my allowance of £10,900 I should not attract any capital gains or additional tax is this correct?

Alex Watts :

Hello my name is XXXXX XXXXX I will help you with this. Please note that I am a working Solicitor and may be on and offline as I have to attend Court and meet with clients, even at weekends. As such you may not get an instant response when you reply as this is not an ‘on demand’ live service, but rest assured I will be giving your question my immediate attention upon return. There is no need to wait here, you will get an email when I reply.

Alex Watts :

Yes you need to declare your actual gain.

Alex Watts :

IF you make £1 per share then your profit is £10,000

Alex Watts :

You deduct the capital allowance for the tax year which is £10,900

Alex Watts :

So yes there would be no tax on this disposal

Alex Watts :

Can I clarify anything for you about this today please?

Customer: Thanks for the clarification can I just confirm. If I purchased the shares as a private company three years ago at £1.00 a share we were owned by a venture capitalist. My liability is set at the iPo price on listing and the gain made when I dispose? I had an enormous tax bill this year as I had to sell 25% on iPo. I want to ensure that I am as prudent in subsequent years.
Alex Watts :

Yes you are correct in your assumption

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