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Sam, Accountant
Category: Tax
Satisfied Customers: 14211
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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HI, i am thinking of selling approx 100k worth of shares today.

Customer Question

HI, i am thinking of selling approx 100k worth of shares today. These were given to me by my employer in the form of LTIPS. I earn 107k per annum and these shares are held with a broker. Can you advise what my capital gains liability would be please ? Many thanks

Mr P UK Resident
Submitted: 4 years ago.
Category: Tax
Expert:  Sam replied 4 years ago.
Hi Mr P

My name is Sam and I am one of the UK tax experts on Just Answer.

Fisrt it would need to established what year the investments were made and for what period they related to, and how much was invested.
Also the time limit imposed by the plan would be needed (as to when the shares were to vest)
And clarification that the amount put into the scheme was already subjected to tax as taken out of a bonus.

Without this information it would be impossible to calculate an accurate capital gain. But worse case scenario (based on the fact that the original amount invested was not subject to tax, you would have £100,000 less £10,600 = £89.400 x 28% = £25,032
But I imagine the capital gains due would in fact be much less as it is very likely you have suffered tax on the initial investment and therefore its just the "gain" (difference between invested taxed amount, and the growth of that share) that would need to be considered.

But your employer or the broker might be able to advise further with a more accurate figure as they would hold all that vital information.



Customer: replied 4 years ago.

is there any reason why i would pay 45% tax ?……as when i go onto the portal, it is showing a 45% reduction in value less broker costs. All schemes are available to vest now. the scheme basically game me, over a few years say 1,000 shares at for instance 6.20 and now the value is 9.30.

Expert:  Sam replied 4 years ago.

Thanks for your response

It would appear that this is making a tax charge under PAYE rather than capital gains, which can be the case (as its employer related - even though your manage the funds independently through the use of a broker) however I would expect the tax charge to be 40 or 50% not 45%

And this link details the position when the vesting and cashing in falls within PAYE

If we add your earnings and this £100K cashing in together then I would expect to see a 50% share (plus broker fees)
I am afraid you will need to consult with your broker or employer to establish how the charge is amde up.