Published / Last Updated on 17/05/2021

Shares (in Limited Companies)

Lump sum investments: Yes

Regular premiums allowed: No

Flexible payments allowed (stop/start/additional/increase/decrease): Yes

Investment Risk Profiles Available: High risk funds available

Changing funds and risk profile allowed: No

Moving to another company allowed: Yes

Life Insurance Included: No

Personal Tax Benefits: For 2024 Tax Year

Tax Free Dividend Allowance £500.00

For dividend income received above this, it is charged to tax at a rate where the taxable income falls within the usual income tax bands

  • Non Tax Payers - no further tax
  • Dividend in Basic Rate Tax Band (20.00 %) - tax due at 8.75 %
  • Dividend in Higher Rate Tax Band (40.00 %) - tax due at 33.75 %
  • Dividend in Additional Rate Tax Band (45.00 %) - tax due at 39.35 %

Can be held inside Trust: Yes

Suitable For:

  • Basic Rate Tax Payers
  • Higher Rate Taxpayers
  • Trusts

Insolvency Compensation Limits:  None - if the limited company becomes insolvent, shares potentially become worthless

Brief Description:

Shares entitle the holder to a share of the profits (after deduction of expenses) and net assets (assets less the liabilities - if the company ceased trading) from a Limited company.

You can buy and sell shares through Stockbrokers, either directly or through a bank or building society.  Because there are so many different types of shares, Stockbrokers generally offer three types of service for you to choose from:

  • Advisory - you will receive advice as to which shares to buy and when to buy them.
  • Discretionary - decisions will be made by the Stockbroker based on the pre arranged strategy you wish to take.  You will be kept informed of changes.
  • Execution Only - you will receive no advice at all.  You must choose your own shares.

For help and advice with shares contact our team.

Share Exchange.

People hold shares for many different reasons.  You may have bought them, inherited them or received them from companies who issued them to their customers following privatisation.

Shares generally are acquired without people knowing all there is to know about the way they are taxed, the amount of risk involved and whether they are a good investment in each persons particular circumstances.

For example, are they as tax efficient as they could be, are they giving you the income or growth you need, are you happy to have money invested in say one company, would you prefer a wider spread for your investments?

If any of these things make you think, "maybe I should sell some shares and do something else with the money", we can advise you.

Many providers of investments offer Share Exchange schemes.  These schemes work by the provider either taking the shares from you (instead of you paying in cash) and using them within their own portfolio of shares or, by selling the shares and your investment being the value of the sold shares.

These providers have large share portfolios and can often offer you lower charges than if you sold them privately.  It could also take a lot less time.  Most providers set a minimum number of shares that you must hold, before they will be able to share exchange.  It is normal for a minimum value of about £1,000.

Depending on the amount of profit you make from any disposals of shares, you may have to pay Capital Gains Tax.

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