Question RBS to be completely nationalised today?

[Vae]

50% is very generous. And the profits from selling those options on the open market are certainly not tax free. From what I was told about the sharesave scheme here, any profits made are subject to standard CGT.

My apologies - profits made from excercising the options are indeed subject to CGT but given the annual allowance it is highly likely that he wouldn't pay any tax.

Also, from investigating the details, it appears the interest rates (actually a tax-free bonus) are set down by the government:
The current details (as at 27 Dec 08) are:
5 year scheme (60 payments) - Bonus is 4.8x monthly contribution which is equivalent to 3.04%. Also if he leaves the scheme before the 5 years are up then, assuming he has been in it a year, the interest rate he is entitled to is 2% (it was 3% from 1 Sept 08)

This means the downside is even less (2% possibly less depending when he got in). As for the 50% chance I wouldn't consider it unreasonable but it does depend on your opinion.

 

[Rulke]

If the bank folds I'll have other things to worry about! Operating under the assumption that I'll still have a job in 5 years time I tend to agree with Vae.

5 years is a long time so I'm betting (and I guess it IS a gamble...) that the share price will be above 50p when the scheme ends. Also I dont have to cash the shares in immediatly - I can buy them at the option price and either cash as many in as I can without incurring CGT or hold onto them if the shareprice is on the rise.

 

[rynnor]

The situation that started with the RBS results and the second bank bailout is now getting out of control - all banking shares are now getting hammered and theres a serious run on sterling with no sign of an end to it.

It would be most interesting to watch developments if only you could get to a safe distance - Mars is favourite

 

[cHodAX]

The situation that started with the RBS results and the second bank bailout is now getting out of control - all banking shares are now getting hammered and theres a serious run on sterling with no sign of an end to it.

It would be most interesting to watch developments if only you could get to a safe distance - Mars is favourite

Invest in lube stocks, the U.K. is going to be needing alot of it if another banks goes to the wall.

 

[Chilly]

My apologies - profits made from excercising the options are indeed subject to CGT but given the annual allowance it is highly likely that he wouldn't pay any tax.

Also, from investigating the details, it appears the interest rates (actually a tax-free bonus) are set down by the government:
The current details (as at 27 Dec 08) are:
5 year scheme (60 payments) - Bonus is 4.8x monthly contribution which is equivalent to 3.04%. Also if he leaves the scheme before the 5 years are up then, assuming he has been in it a year, the interest rate he is entitled to is 2% (it was 3% from 1 Sept 08)

This means the downside is even less (2% possibly less depending when he got in). As for the 50% chance I wouldn't consider it unreasonable but it does depend on your opinion.

Yeah all good points, fair enough. I suppose the only argument left for backing out now would be because he couldnt afford it - but given hes already on it that seems unlikely.