Latest news with #RobMorgan
Daily Mail
30-05-2025
- Business
- Daily Mail
I have £20,000 in shares from an old employer, can I cut my capital gains tax bill?
I have £20,000 worth of shares held outside of an Isa from an old employer's share save and employee share schemes dating back to when I worked there between 2008 and 2014. I would like to sell the shares and reinvest the money into more diversified investments but think I will end up with a big tax bill, even though I am a basic rate taxpayer. I have been reinvesting dividends and buying more shares regularly throughout the ownership. What do I use as the purchase price for capital gains tax – each individual share price or an average? And is there any way that I can cut my tax bill if I sell? The shares are held as certificates, if I keep hold of them, can I move them into an investment account? Rob Morgan, chief analyst at Charles Stanley Direct, replies: Gains on shares purchased at various points through additions such as reinvesting dividends can appear be something of a tax headache. However, if you have kept good records the calculations in most circumstances aren't too bad. Capital gains tax rules First the basics. Capital gains tax (CGT) is a tax on any profits made on investments, and as you are aware you will be potentially liable on the sale of shares held outside a tax-efficient account such as an Isa. The amount of tax you're charged depends on which income tax band you fall into. For the 2025/26 tax year, rates of CGT are 18 per cent and 24 per cent for basic and higher rate taxpayers respectively. This rate applies to the profit made – so sale proceeds minus the cost of purchase. > What is capital gains tax? Read Charles Stanley Direct's guide Not widely understood is the interaction of CGT with income tax bands. If you're a basic rate taxpayer, any gain taken when added to your income could push you into the higher-rate bracket. If so, you'd pay 24 per cent on however much of the gain falls into the higher income tax band when added to your income, and 18 per cent on the portion below it. If you are a Scottish taxpayer your CGT rate depends on the rest of UK income tax bands and not the Scottish tax bands. You'll only need to pay tax if your realised profits in a tax year exceed the annual capital gains tax allowance. In the 2025/26 tax year, this is £3,000. For example: If you bought shares for £10,000 and sell them this tax year for £30,000, then you've made a capital gain of £20,000. If you have no other gains, this is reduced to £17,000 as the first £3,000 falls into the CGT annual exemption. For a basic rate taxpayer (with income and gains falling below the higher rate tax band) the tax liability is £17,000 x 0.18 = £3,060 However, if the gain tips you into the income tax higher rate band then you pay the higher rate of CGT on the portion over the threshold of £50,270. For this reason, many basic rate taxpayers can end up paying mostly higher rate CGT on large gains. Calculating CGT from multiple purchases Calculating the gain on shares and the tax to pay is reasonably straightforward if you have the figures to hand. In most circumstances you just need to know the number of shares and the total amount paid for them by adding up all the purchase transactions. You then net the total cost of the sale proceeds (after any fees such as stockbroking commission) to calculate the gain. When making multiple sales the purchase cost simply applies on a 'pro rata' basis to each sale. The main exception to this 'pooling' rule is the 'same day' rule whereby shares acquired on the same day as the disposal are taken account of ahead of any others. There is also the 'bed and breakfasting' or '30 day' rule whereby any shares repurchased within 30 days cancel out the gain or loss generated by the prior sale – but not if repurchased in an Isa. However, it appears neither of these apply in your circumstances. As with many tax matters, there are examples and help sheets on the HMRC website that can help, but as with any tax issue if you are in any doubt you should consult a qualified tax specialist. Ways to minimise CGT To mitigate CGT there are some strategies you can adopt. If the capital gain, and therefore the potential tax liability, is significant you can consider taking advantage of the CGT allowance over multiple tax years. The allowance has been much diminished and now stands at just £3,000, but selling an asset in bits over time can help minimise CGT. You can't do that with a second property or an antique of course, but you can with shares and funds. If you are planning to keep some or all your holding you can consider using the £20,000 Isa allowance to at least protect it from tax going forward – both in terms of income tax on dividends and any future gains. The process here is known as a 'Bed & Isa' which can help use your CGT and Isa allowances simultaneously. A Bed & Isa involves selling holdings and then buying them back in an Isa account. The sale part generates a capital gain, so selling or partially selling an existing investment could help with tax planning by using some of your capital gains allowance while keeping your holding. > Bed & Isa and other Isa rules to make your life easier: Charles Stanley's guide Outside of an Isa or pension you are prevented from generating gains in this way owing to the 'bed and breakfasting' rule mentioned above. This highlights that prevention is often easier than cure when it comes to CGT. Buying shares in an Isa, or transferring them in at the earliest opportunity, is often the best way to avoid storing up problems further down the line. One valuable tactic that many people miss is the special rules around transferring eligible shares from a save as you earn (SAYE) or share incentive plan (SIP) scheme tax free into an Isa within 90 days of acquisition. Potentially, it's a great way to use your Isa allowance and shelter up to £20,000 of a holding from tax. Another strategy to reduce CGT involves transferring some of the asset to a partner if you are married or in a civil partnership. You usually don't pay capital gains tax on an asset you give or sell to your husband, wife or civil partner, and this could give you the option of using two CGT allowances each tax year. A couple, for instance, could realise gains of up to £6,000 this tax year without paying tax. You could also consider dividing the shareholding in such a way to take advantage of lower tax bands where one partner's income is lower. This way there may be less tax to pay on the gain as more of it falls into the basic rate band than the higher rate band for one of the pair. Finally, if you have any losses on investments elsewhere you may have opportunity to set these off against gains. If you sell an asset for less than you paid for, you can report that loss to HMRC to offset against any gains you've made in the same tax year. You have up to four years from the end of the tax year in which the loss occurred to make a claim. This can reduce your overall taxable gain and in some circumstances bring it below the annual CGT allowance. Keeping the shares It can be difficult to know whether to sell a shareholding with a tax liability attached to it. Much depends on the outlook and reliability of the company in question and the level of risk the holder is happy with. The rule of thumb is that the tax tail shouldn't wag the investment dog, and in the case of a large single stock position it can be wise to diversify to limit the impact if it falls in value. That's especially the case if a drop could have a big impact on your financial resilience. Having your financial future heavily influenced by one business is a risk most people wouldn't be willing to take – unless they are inexorably attached to it through ownership or otherwise have significant confidence in the prospects. A diversified approach won't guarantee a better result, but it's far less risky. Ideally, a careful strategy around sales can help minimise the tax burden and smooth the path towards that. We have only seen the tax burden ratchet over time, and it seems a forlorn hope that it might reverse direction, at least in the near term, so from that perspective there may be nothing to be gained by putting off the issue. However, if you decide to keep your shares, contact your stockbroker or investment platform to see if they can help with 'dematerialising' them. In other words, converting them from a physical certificate into electronic form. This will make things easier to manage going forward if you want to keep them. It will also mean future sales are easier to execute and will cost less as brokers generally charge a lot more for a certificated sale. You'll have to fill in some paperwork to do this and wait a short period for the process to complete. For instance, at Charles Stanley once the original share certificates and signed transfer forms are received we would expect the holdings to be deposited in an online account within 5 to 10 business days under normal circumstances.
Yahoo
04-04-2025
- Business
- Yahoo
Have you maximised your allowances ahead of the tax year-end? Here's how readers voted
Ahead of the tax-year end investors are encouraged to make the most of their annual tax-efficient investment allowances before they reset. That includes the individual savings account (ISA) allowance, which allows savers to shelter up to £20,000 a year tax-free, in cash or investments, such as stocks. Data released by the Bank of England on Monday showed that households deposited an additional £3.6bn into ISAs in February. However, research from investment management company Charles Stanley, released on Wednesday, found that a quarter of ISA holders were unaware of the deadline for their yearly allowance. Read more: Best cash-saving deals as Bank of England holds interest rates Nearly a fifth (18%) of respondents to the research, conducted by Censuswide in a sample of 3,000 "mass affluent" consumers, said they know that they can't fulfill the full allowance so don't pay anymore into their ISA than they already do. Meanwhile, 7% said that they forget about deadline and then rush to top up their ISA before it's too late. Rob Morgan, chief investment analyst at Charles Stanley, said that ISAs are the "Swiss army knife of financial planning and can be used for nearly everyone's needs and priorities. Yet there are clearly many who don't know about the ISA deadlines in place. This raises concerns over how many are taking true advantage of their ISA allowance to maximise their savings and build superior compound gains." At the beginning of the week, we asked Yahoo Finance UK readers if they had maximised their allowances before the tax-year end. We received 316 votes, with 39% of respondents saying that they had, while 52% had not and 9% were unsure. Read more: How Trump's tariffs will impact your finances and the UK economy What you need to know about investing in VCTs What April's rise in household bills means for your savingsSign in to access your portfolio
Telegraph
22-03-2025
- Business
- Telegraph
The little-used funds that can save hundreds of thousands in tax (and are safe from Rachel Reeves)
Try as you might to build a nest egg, the spectre of Rachel Reeves looms large over your savings. Pensions are to be brought within the scope of inheritance tax, and the Chancellor is reportedly eyeing up further tax raids on Isas. But Labour's vision for growth at all costs already has Britain's wealthiest investors considering little-used investment funds that have a better chance of being left alone. Rob Morgan, chief analyst at wealth manager Charles Stanley, said: 'While Isas and pensions have been in the Chancellor's cross hairs for rule changes, venture capital trusts (VCTs) and enterprise investment schemes (EIS) have flown beneath the radar.' He says Ms Reeves is unlikely to take aim at these kinds of investments 'partly because they are niche and the tax breaks cost little, but more importantly they directly support an ambition of investment and growth in Britain's grassroots businesses – something the Government badly needs'. Mr Morgan predicted that high earners with restricted pension allowances would increasingly turn to these alternatives to mainstream investments. VCTs are listed funds that in turn invest in early-stage small businesses that may not be listed on the main stock exchange. Up to £200,000 can be invested in VCTs each year. As a result, Emma Wall, of Hargreaves Lansdown, said they are typically the reserve of the very wealthy, 'who are able to take on the additional risks with a small portion of their portfolio'. She added: 'These are often higher or additional-rate UK taxpayers who've already used their Isa and pension allowances,' she added. 'The tax breaks encourage investment in smaller companies which are a vital area of the UK economy and offset the higher investment risks.' Investors in VCTs do not pay capital gains tax and enjoy tax-free dividends. Investors also benefit from 30pc income tax relief after five years (as long as they buy into a new share issue). But the price of such big tax breaks can be steep, and ploughing money into startups via VCTs is undeniably risky – investments could fall in value, potentially to zero. So, what have the returns been like? In the 10 years to December 2024, the 10 largest generalist VCT managers have delivered an average return of 64.3pc, assuming dividends are reinvested – compared with 81.9pc for the UK main market, according to Wealth Club. 'Can be volatile' 'Investments in smaller companies can be volatile,' advises Octopus Investments, Britain's largest VCT manager. 'Their shares could fall or rise in value more than other shares listed on the main market of the London Stock Exchange. They may also be harder to sell.' Companies previously backed by VCTs include alcohol-free beer brand Lucky Saint, property listing site Zoopla, stockbroker Interactive Investor, and Virgin Wines. Being listed companies, VCTs can be bought on the open market via brokers such as Hargreaves Lansdown or AJ Bell. However, these do not offer the same upfront tax relief available with new VCT shares, as they are technically 'second hand' shares that have been owned previously. Nicholas Hyett, of specialist adviser Wealth Club, said: 'It's not just the mega-wealthy who can benefit. VCT minimum investments start from £3,000, while the minimum investments for EIS funds start from £10,000.' Wealth Club hopes investing in VCTs will spread beyond the super-rich, and Mr Hyett stresses that they should be part of a well-balanced portfolio. The platform estimates that maxing out on venture capital allowances could cut a tax bill by up to £2.5m this year. Enterprise investment schemes function similarly to VCTs, but the number of companies they invest in is far fewer. Typically, an EIS fund will give you exposure to between five and 15 companies, compared with the hundreds held in a VCT. EISs are therefore more concentrated – and hence higher risk – than a VCT. But in recognition of this, the tax reliefs are more generous. 'If you lose money on your EIS investment, you can write the loss off against your tax bill in the year you make the loss,' Mr Hyett explained. 'So if a £10,000 investment resulted in a total loss, once you take into account all the tax reliefs, the most a 45pc taxpayer could lose is £3,850. To keep the tax relief you must hold an EIS investment for at least three years.' Alan Price, a retired helicopter pilot, has been investing in VCTs via Wealth Club since 2012. 'I haven't paid income tax since 2006, and I'd say I've saved several million in tax,' he said. The 71-year-old is a fierce defender of VCTs, and would support a tax raid on cash Isas if it meant putting money into small businesses. Mr Price's investments included the Octopus Titan fund, which has backed car retailer Cazoo and Gen-Z e-commerce darling Depop. 'I sold those a few years ago and had an extraordinarily large dividend,' he said. The retiree does not consider himself to be ultra-wealthy, although he is undoubtedly eccentric. Mr Price busies himself in retirement as a Deliveroo rider in Battersea where he lives, delivering takeaways on a penny farthing. 'When I have to put petrol in my Porsche I do a bit of delivering,' he said. 'The income from my VCTs is more than all my pensions put together.' Which VCT should you buy? Alex Davies, of Wealth Club, a specialist adviser on VCTs, recommended two funds. 'The Baronsmead portfolio is probably the most diverse of all VCTs,' Mr Davies said. 'The two VCTs have a portfolio of 85 companies spread across early-stage growth companies, legacy management buyouts and AIM, as well as investing in three Gresham House managed UK equity funds. 'That diversification, together with significant exposure to more mature businesses, has historically made Baronsmead something of a gateway VCT for investors new to the sector. 'Unfortunately, listed UK smaller companies have been a tough place to invest in recent years. However, that could present an opportunity going forwards. 'With 65pc of the portfolio invested in UK listed companies, a turn in sentiment towards the UK has the potential to translate quickly into substantial gains for the VCT.' Mr Davies says: 'Pembroke VCT is a generalist investor, but unlike many VCTs it has particular expertise in backing consumer brands – an area where it has had a number of exits. 'Past successes include women's fashion brand ME+EM, and fresh pasta delivery service Pasta Evangelists. 'LYMA, the VCT's current largest investment accounting for 15.1pc of the portfolio, has developed a medical-grade laser for at-home use to improve skin health which was voted one of TIME Magazine's inventions of the year in 2023 and the VCT investment is currently valued at 16.9 times its cost.'
CBC
13-02-2025
- Business
- CBC
Alberta Energy Regulator names former oil and gas CEO as top executive
Alberta's energy watchdog has chosen a former oil and gas company CEO as its new boss. The Alberta Energy Regulator says Rob Morgan, who most recently led Strathcona Resources, is to take the helm starting Tuesday. The AER says Morgan is an engineer who has almost 40 years of oil and gas industry experience. The regulator says Premier Danielle Smith's United Conservative Party government has set a goal of increasing oil and gas production and accessing new markets, and the AER has a key role in that. It says Morgan brings industry experience, skills and knowledge to help the AER "turn the page" as a "responsible and effective regulator." The AER has been criticized for how it informed the public and local First Nations about the release of millions of litres of oilsands wastewater from Imperial Oil's Kearl mine in northern Alberta in 2022. "I'm steadfast in my belief that a modern, efficient and effective regulator can provide the necessary safeguards for the environment while ensuring industry can deliver on the safe and innovative development of Alberta's resources," Morgan said in the statement Thursday.
