Shares are pieces of a limited company. If you own them, you’re technically called a “shareholder”.
You can get shares in many ways like:
Starting your own limited company
Receiving shares in the company that you work for – as a bonus or as an incentive
Buying them, usually through a broker or investment app
They are also sometimes called “stocks”.
What owning shares means for your tax situation:
If you earn dividends from your shares, and if those dividends are over £1,000 (the dividend allowance this year), you need to pay dividend tax on them (either through your tax code or through a Self Assessment tax return)
If you received shares in the company you work for, you might need to pay Income Tax and National Insurance – unless your employer applied for a special company share options scheme like CSOP or EMI
Any earnings from shares held in a Stocks & Shares ISA are completely tax-free
The same goes for earnings from shares that your private pension invests in
Finally, if you invested in shares of EIS or SEIS startups (for example, through websites like Crowdcube or Seedrs), you can file a tax return and claim Income Tax relief (either 30% or 50%)
