SIP shares

[Marke87]

Hi everyone,

Apologies if this has been asked before—I’ve had a look but couldn’t find a clear answer.

I’ve been purchasing shares weekly from my wages through my SIP account (Equiniti) for the past three years. Currently, I hold:

1,333 Partnership Shares
74 Matching Shares (two free shares given monthly)

My question is regarding tax implications. After holding these shares for three years:

Will I still need to pay Income Tax or Capital Gains Tax (CGT) on them?
Based on my calculations: (1,333 + 74) × £3.60 = £5,062.20 + £112.56 (0.08p special dividends) — would this total amount be subject to tax?

I’d really appreciate any insights or clarification on this.

Thanks in advance!

[Poppyellie69]

Share money will b tax free when the takeovers complete

[cornstar18]

Hope so but not seen that confirmed anywhere. Royal mail don't decide tax rules and I doubt the new owners will pay any tax liabilities for us

[RobertT]

The P&M booklet suggests if the company is 'sold or transferred', then no income tax or NIC's are payable on SIP shares.

There's a link to it here: https://www.myroyalmail.com/PartnershipandMatching

[yellowbelly]

Hope so but not seen that confirmed anywhere. Royal mail don't decide tax rules and I doubt the new owners will pay any tax liabilities for us

From the SIP Trustee Cover Letter available here: https://idsoffer.shareview.info/SIP.htm

8. What tax will I have to pay?

As the tax rules for each country are different, the final amount of tax and social security contributions
you will have to pay depends on where you are resident for tax purposes. This section assumes you
are resident and domiciled in the United Kingdom at all relevant times.

You should not have to pay income tax, National Insurance contributions or capital gains tax if you sell
your SIP Shares directly out of the SIP trust to Bidco under the terms of the Offer.

You will potentially be liable for dividend income tax on the value of the 2024 Final Dividend and Special
Dividend. You can receive up to £500 of dividend income tax free in the tax year ending 5 April 2025.
Any dividend income above £500 received in the tax year ending 5 April 2025 will be taxable at the rate
of 8.75% for basic rate taxpayers, 33.75% for higher rate taxpayers and 39.35% for additional rate
taxpayers.

If you receive more than £500 of dividends in the tax year ending 5 April 2025, you will need to contact HMRC
to arrange payment of any tax due. More information can be found at https://www.gov.uk/tax-on-dividends.
The timing of Completion and payment of the 2024 Final Dividend and the Special Dividend may affect
your tax liability. The tax limits and rates above may change for any dividends received in the tax year
ended 5 April 2026. If you receive any dividends in the tax year ending 5 April 2026 (e.g., if the Special
Dividend is paid during the tax year ending 5 April 2026), you should check the applicable tax limits and
rates and contact HMRC to arrange payment of any tax due.

If the SIP Trustee is holding any residual cash which was deducted from your salary but was insufficient
to buy a SIP Share, the cash will be returned to you through the next available payroll after deduction
of income tax and National Insurance contributions.

This information is intended as a general guide only and does not constitute tax advice to any individual
participant. Please remember that tax law can and often does change, and you should not necessarily
assume the current tax position will continue. We strongly recommend that if you are unsure how
your SIP Shares will be taxed, you seek advice from an independent financial or tax adviser.
Please note that none of Equiniti, the SIP Trustee, IDS, Royal Mail, or any of their employees, can
provide you with legal, personal tax or financial advice.

[cornstar18]

Thanks for info, well I kept paying just in case so yeah that works nicely