Anyone know how shares work??

[Gray]

At my company i've been paying in £100 per month for 3 years. The price the shares were at the time of me starting this was only 58p, which will entitle me to 6153 shares, in total this means i'll have paid in just over £3500.

At the time i thought i'd probably only double my amount, but at this time i've found that actually the shares are now at £1.60 - Almost treble what they were 3 years ago...

So, if i sold these shares in a few months, will this mean i'm in for a big payday?? By my calculations i'd be looking at £10,000 return?

 

[Zarjazz]

Every companies share scheme is different and the details matter. I will say being able to buy shares 3 years later at the same price you joined at sounds a little odd.

Usually when you sell shares you'll have to pay Capital Gains Tax (upto 40%) on the profit but you may qualify for Employee shareholder exemptions which mean you don't on amounts less than £50,000. If the HR department can't assist then frankly get an accountant to advise as it can get complicated.

 

[Moriath]

Ihad a share scheme where you bpught and had to hold for three years for tax purposes.

You need to check what they were bpught at and comlare them to what theyare now

You get a seven ish grand capital gains limit which means the difference between what you bought and sell at cant be more than that or you pay tax on the difference.

What probably happened was each year they bpught you shares. Means that you cant sell for three years from each purchase.

But need to check the exact terms,

I sold mine ina couple lots so i didnt get taxed. If your company has doubled its share price you might be in for a little wind fall.

 

[DaGaffer]

Every companies share scheme is different and the details matter. I will say being able to buy shares 3 years later at the same price you joined at sounds a little odd.

Usually when you sell shares you'll have to pay Capital Gains Tax (upto 40%) on the profit but you may qualify for Employee shareholder exemptions which mean you don't on amounts less than £50,000. If the HR department can't assist then frankly get an accountant to advise as it can get complicated.

That's how the scheme at GAME worked. I thought it was fairly normal tbh; options are set at a certain point and you get the option to vest three years later. If you're lucky they're up, if not you can wait until they are (hopefully). Usually these schemes are taxed under PAYE as well.

 

[DaGaffer]

At my company i've been paying in £100 per month for 3 years. The price the shares were at the time of me starting this was only 58p, which will entitle me to 6153 shares, in total this means i'll have paid in just over £3500.

At the time i thought i'd probably only double my amount, but at this time i've found that actually the shares are now at £1.60 - Almost treble what they were 3 years ago...

So, if i sold these shares in a few months, will this mean i'm in for a big payday?? By my calculations i'd be looking at £10,000 return?

You return is actually £6276 (10K - 3.5K) and you'll be taxed on that, not the full value of the shares. So you'll get about 7K if you're a 40% taxpayer.

 

[leggy]

Does your scheme include matched shares? With the scheme I'm in, the company will give me 100% matching shares on the first £25 I spend, then 50% for the remainder up to £120.

The catch being that if I sell the shares within a million years of buying them I lose the matching shares.

Either way by DaGaffers calculation, that's quite a nice return on your £3500.

 

[Moriath]

You return is actually £6276 (10K - 3.5K) and you'll be taxed on that, not the full value of the shares. So you'll get about 7K if you're a 40% taxpayer.

Only after capital gains though. Which was arpund 7k so probably wouldnt get taxed.

 

[old.user4556]

In my scheme, you only paid tax and NI if you sold them before five years. Keep for five years, reap the rewards.

 

[leggy]

In my scheme, you only paid tax and NI if you sold them before five years. Keep for five years, reap the rewards.

Same here,but the only share which is tax free after 5 years is the very first share you bought.

 

[Gray]

The scheme will be maturing come September, couldn't have come at a better time for me. I guess i would get taxed on it, hopefully not a big amount. I did originally think i was going to get £6k back, so when i seen the shares had actually trebled i seen nice big ££ infront of my eyes, but even £6k would be a nice sum for doing nothing at all!

 

[Gumbo]

The devil will be in the detail, and your employer should be able to provide the detail. There is normally a time you have to hold the shares in order to get any bonus ones, it's rarely completely straightforward.

 

[Ch3tan]

My scheme is tax free for gains made many are, so check the details.