Windfall Shares

[msemma]

Can someone explain something for me in simple terms? If my building society gives me windfall shares, what am I supposed to do with them? Do I have to declare them to the Inland Revenue for tax or anything? What if I sell them straight away or in the future? What are dividends and should I declare them too?

[dzug]

You have the choice of keeping them or selling them

If you sell them you will be liable for Capital Gains Tax if the gain is more than �8500*. As you got them for nothing (presumably) the gain and selling price will be the same. (*This assumes they are the only shares you sell in the tax year in which you sell them; if not it's the total gains in the year that are relevant).

You only have to tell the taxman when you make the gain - ie sell them.

If you keep them, you'll get dividends (like interest in a savings account except they are based on profits and are not a predetermined rate) which are taxed before you get them. You don't need to tell the taxman unless you are a higher rate tax payer (in which case you will have extra tax to pay) or are asked to do a tax return anyway.

[Gadgetman]

msemma I'm assuming your shares were given to you because you're a member of that society (i.e. a saver or borrower). You can keep or sell them dependant on if you would rather have the money or not. Look up the capital gains tax allowance. If the profit you make on the shares is over this amount then you pay on the portion that's above this limit. Dividends are like interest payments on bank accounts. Some are paid out twice a year and are, i think, classed as income. I am not a financial adviser, so what you do with them is your choice. Hope this has helped.

[Gadgetman]

Sorry dzug. obviously I didn't scroll down to see your answer oops.