Capital gain tax liability moving SAYE proceeds to Flexible Shares ISA

I am the highest rate income tax payer. I invested £18K in Save as you earn (SAYE) sharesave scheme with my employer which has matured on 1-Oct-2023. The options are now worth £35K, i.e., there is £17K worth of gain on options. I am planning to exercise options on 28-Mar-2024 to get company share certificates and do following steps within 90 days of 28-Mar-2024 but after 6-Apr-2024: 1) Convert ALL the share certificates worth £35K to electronic form by transferring to General Investment Account (GIA). 2) Transfer £20K worth of shares from GIA to Flexible Shares ISA account. This is using full £20K ISA allowance for 2024/25. 3) Sell £20K worth of shares in Flexible ISA and withdraw £20K cash. 4) Since it is Flexible ISA, transfer remaining £15K shares from GIA to Flexible Shares ISA account. 5) Sell these remaining shares and withdraw £15K cash. Would it be correct to say that at the end of this entire process of following steps 1 to 5 above, I DO NOT HAVE ANY CGT liability arising from these transactions as all the £17K gain is withdrawn within an ISA wrapper. That is I do not pay any Capital Gains Tax on £17K profit. And I can still add £20K to my ISA for tax year 2024/25. For the purpose of this illustration, I assumed the share prices do not change while doing steps #1 to #6.

Hi admins - anyone who can provide some guidance here? Thanks

Hi,

You need to transfer the shares to the ISA without them being transferred elsewhere. By putting them into another account first, you are not meeting the conditions for them to be exempt from capital gains. You can see guidance here:

CG56451 - SAYE share option schemes: Individual Savings Accounts

Thank you.

Hi HMRC Admin 19, Thanks for your response. Understood. I have now modified steps #1 to #5 in my original post above to #1 to #4 as shown below. Does below steps imply that I DO NOT HAVE ANY CGT liability arising from these transactions as all the £17K gain is withdrawn within an ISA wrapper. That is I do not pay any Capital Gains Tax on the £17K profit from proceeds of SAYE scheme. And I can still add £20K to my ISA for tax year 2024/25: 1) Transfer £20K worth of share certificates to Flexible Shares ISA account. This is using full £20K ISA allowance for 2024/25. 2) Sell £20K worth of shares in Flexible ISA and withdraw £20K cash. 3) Since it is Flexible ISA, transfer remaining £15K share certificates to Flexible Shares ISA account. 4) Sell these remaining shares and withdraw £15K cash. Thanks, 

Name removed admin . 

Hi admins - Could you help close this matter please. Thanks.

Hi,

If you do not transfer your shares to a pension immediately when the scheme ends, you can still transfer them up to 90 days later. You may have to pay Capital Gains Tax if they go up in value between when you buy them and when you transfer them.

Your ISA provider will need to agree to the transfer of shares. They will count towards your £20000 limit and cannot be in addition to the £20000 limit. You can see guidance here:

Tax and Employee Share Schemes

Thank you.

Hi, Thanks for replying and sharing the link to HMRC guidance on the topic. However, it does not answer my question and the wordings on the above HMRC link are not very clear. I would appreciate if someone can help answer this question using the hypothetical numbers that I provided. Doing so would make it crystal clear for everyone who is in similar situation. Please allow me to summarize everything below: I invested £18K in Save as you earn (SAYE) Sharesave scheme with my employer which has matured on 1-Oct-2023. The options are now worth £35K, i.e., there is £17K worth of gain on options. I am planning to exercise these options on 28-Mar-2024 to get company share certificates and do following steps within 90 days of 28-Mar-2024 but after 6-Apr-2024: (1) Transfer £20K worth of share certificates to Flexible Shares ISA account. This is using full £20K ISA allowance for 2024/25. (2) Sell £20K worth of shares in Flexible Shares ISA and withdraw £20K cash. (3) Since it is a Flexible Shares ISA, transfer the remaining £15K share certificates to this Flexible Shares ISA account. (4) Sell these remaining shares and withdraw £15K cash. Would it be correct to say that at the end of this entire process of following steps 1 to 4 above, I DO NOT HAVE ANY CGT liability arising for the £17K gain since it is withdrawn within an ISA wrapper. That is I am not liable to pay any Capital Gains Tax on the £17K profit. And I can still add £20K to my Flexible Shares ISA for tax year 2024/25. For the purpose of this illustration, I assumed the share prices do not change while doing steps #1 to #4. Thanks a lot!

Hi rahuls,
We cannot comment on scenarios, only provide general information / guidance in this forum.
For an answer to a detailed question of this nature, you would need to contact our Self Assesment helpline on 0300 200 3310 or seek professional advice.
Thank you. 

Admin 19 states: You need to transfer the shares to the ISA without them being transferred elsewhere Please can you post a link where it says shares acquired from exercising SAYE option must be transferred DIRECTLY to an ISA without them being transferred General Investment Account first?

Hi Ed,
Please have a look at Stocks and Shares ISA investments for ISA managers.
Thank you.

 

Hi Rahuls, did you find any more information, or were successful in, doing the above? Thanks