25slim76 wrote:dspp wrote:I've seen the valid comments the others have made re CGT etc.
I have been in similar share schemes with another oil major once. As far as I can see he is well outside the 5-year lockup period so these are simply his shares.
Can I just check some numbers here please.
You say a 6-figure sum of shares. I assume from that you mean a 6-figure sum in value terms, e.g. £250,000 - $150,000 which would be about the number I would expect, rather than the alternative being (say) 100,000 shares x $65ea which would be quite a different matter. So could you firstly clarify that please.
Holding them in XOM is quite a concentration in one place, so shifting them largely (or maybe entirely) out of XOM is sensible for many reasons. How fast to do that and where to put it depends on many factors, one of which is the CGT bill that would be payable if he sold the lot now in one hit.
Are you able to tell us the average price of the accumulated shares, and the approximate time they have been held for (or at least date he started & stopped accumulating) ? If the average price is (say) $45 then the CGT implications are very different than if the average price was (say) $60. That helps get a feel for the appropriate timescale to try and tax manage the CGT issue, i.e. how many years to work it out within the CGT allowance. Oh, and how old is he ?
Regards, dspp
Sorry, I should have been clearer. Yes, a six figure sum in value terms. The average price is a tricky one to answer as he has never really taken an active role in his finances and so accumulated all these shares but never really retained any of the information as to the finer details of them. After just having a more in depth chat with him he seems to think he started paying in around 1980 and stopped paying in around 2000. To withdraw £12k per year to avoid CGT seems like the most sensible route but is likely to take 20+ years so am thinking if there's a way to find out what he paid in and then withdraw that portion as a lump sum and then £12k per year of the remainder. The big question is how do I find out what he paid in if he doesn't have in his possession any of this information? He's currently 73.0x3F wrote:I read that the energy sector % of S&P is at historical lows, with XOM at/around 10 years lows. I'd expect this to revert back, and would be inclined to rotate out of the holding slowly over time rather sell everything in one go and risk jumping from an undervalued sector to an over valued one.
Funnily enough this is something that had crossed my mind as well. I've read a fair bit of info suggesting XOM is likely to turn things around in the not too distant future - maybe some wishful thinking but who knows?
1980 : $4 - 2000 : $40 So there could be a very sizeable taxable gain sitting in there.
If you have the total # of shares, and can make a stab at the dates, then personally I'd just spread them evenly (or pro rata with annual salary, if known) and take the mid-year share price. Otherwise you are going to need to contact the XOM share registrar and ask for help. Personally I wouldn't fuss too much at this stage, just use a pro rata approach to be able to run some approximations.
You can make some fag packet assumptions regarding the above then go to https://www.gov.uk/tax-sell-shares/work-out-your-gain and enter the relevant data. A lot will depend on his tax bracket. A lot will also depend on whether he actually needs any money, or if this is just a tidying up / risk mge exercise.
Given all this however it might be best to just work it off in £12k gain chunks one year at a time, so as to make a start on minimising the problem for (at least) inheritors.
Other Fools are far more knowlegeable on tax than I am. They will be along shortly I expect.
regards, dspp