If you hold shares acquired through a share incentive plan, you have a limited window to move them into a more tax-efficient account. Once your shares leave the SIP trustee, you have 90 days to transfer them into an ISA or pension. If you complete the transfer within this 90-day period, you can do so without triggering Capital Gains Tax (CGT).
However, if you miss the 90-day deadline, any future increase in the value of those shares may become subject to Capital Gains Tax, just like a regular investment.
This guide explains, in simple terms, how the SIP shares 90-day rule works, how it applies to the different types of SIP shares, and the steps you should follow to transfer your shares into an ISA or pension within the deadline to avoid unnecessary tax.
What is the SIP 90-day rule?
The SIP 90-day rule is an HMRC provision that gives you a limited period to preserve certain tax benefits after your shares leave a share incentive plan.
Once your shares are removed from the SIP, you have 90 days to either transfer the eligible shares into a Stocks and Shares ISA or, where applicable, sell the shares and contribute the proceeds to a pension.
If you complete the transfer within the 90-day window, any gain that has built up on the shares up to the date they leave the SIP will not trigger Capital Gains Tax.
However, if you miss the 90-day deadline, any future gain on those shares may become subject to Capital Gains Tax, just like any other taxable investment. That is why, if you intend to move your SIP shares into an ISA or use the proceeds for a pension contribution, it is generally best to do so within the 90 days to maximize your tax efficiency.
How the CGT-Free Window Actually Works
The 90-day period begins on the date your SIP shares leave the control of the trustee and become your personal property.
In other words, the countdown does not start from the day you joined the Share Incentive Plan. Instead, it starts on the date the shares are transferred out of the plan. This is a common source of confusion, so rather than estimating the date, you should always check your SIP statement to confirm the exact transfer date.
If you transfer the shares into a Stocks and Shares ISA within those 90 days or sell them and contribute the proceeds to a pension, any gain that accrued while the shares were held within the SIP will not be subject to CGT.
It is important to note that this rule is completely separate from your annual Capital Gains Tax allowance.
For the 2026/27 tax year, the annual CGT allowance is £3,000, but the 90-day rule is not about using that allowance. Instead, its purpose is to allow you to move eligible SIP shares into a tax-advantaged account, such as an ISA or pension, within the specified timeframe so that you can avoid Capital Gains Tax on the qualifying gain.
Does the 90-day rule apply the same way to all SIP shares?
No. Share Incentive Plan tax rules treat the four types of SIP share slightly differently once they leave the trustee:
Free Shares and Matching Shares given by your employer at no cost to you generally qualify for the same CGT-free transfer treatment, provided you act within the 90 days.
Partnership Shares, which you bought using your own pre-tax salary, also qualify, since the tax advantage sits with the value growth, not your original purchase.
Dividend Shares, bought using reinvested dividends from your SIP holding, are usually treated the same way, but the income tax position on the original dividend can differ depending on how long the shares were held before you took them out.
Transfer SIP Shares to ISA: How It Works
The most common route is to transfer SIP shares to ISA, specifically a stocks and shares ISA, since cash ISAs can't hold shares directly. Learn how a SIP compares to a stocks and shares ISA.
Key points to know:
The ISA subscription limit for 2026/27 is £20,000 across all your ISAs combined, and SIP share transfers made within the 90-day window don't count as a fresh subscription in the same way a cash deposit would, but they still need to fit within your overall annual limit.
Once inside the ISA, any future growth, dividends, and eventual sale proceeds are free of both Capital Gains Tax and income tax.
Not every ISA provider accepts direct SIP shares 90-day rule transfers "in specie" (as shares rather than cash), so you'll need to check with your chosen provider before the window closes.
SIP Shares Into Pension: How It Works
Moving SIP shares into pension works a little differently, since most pension schemes don't accept shares directly either.
In practice, this usually means selling the shares CGT-free within the 90-day window and paying the cash proceeds into your pension as a contribution.
A few things to weigh up:
Pension contributions attract tax relief, and the standard annual allowance for 2026/27 is £60,000, covering personal, employer, and third-party contributions combined.
Unlike an ISA, pension money is generally locked away until you reach minimum pension age, so this route suits people who are confident they won't need the funds sooner.
If you're a higher earner already close to your annual allowance through other pension contributions, adding SIP proceeds on top could trigger a tax charge, so it's worth checking your total contributions for the year first.
ISA vs Pension: Which Suits Your SIP Shares?
| Factor | Stocks & Shares ISA | Pension |
|---|---|---|
| Annual limit (2026/27) | £20,000 across all ISAs | £60,000 standard annual allowance |
| Access to funds | Any time, no penalty | Locked until minimum pension age |
| Tax on growth | Free of CGT and Income Tax | Free of CGT and Income Tax while invested |
| Tax relief on the way in | None | Relief at your marginal rate (on cash contributions) |
| Reversibility | Can withdraw and change plans | Effectively irreversible until retirement age |
There's no universally correct choice here. An ISA suits people who want flexibility and may need the money before retirement. A pension suits people prioritising long-term tax-efficient growth and who won't miss the access. Some people split the value between both, using their HMRC SIP transfer rules allowance to move part into each wrapper.
How to Transfer Your SIP Shares: Step-by-Step Guide
Confirm your trigger date: Check your SIP statement or ask your plan administrator for the exact date your shares left trustee control. This starts your 90-day countdown.
Decide between ISA and pension (or a split of both), based on your access needs and existing pension contributions for the year.
Contact your chosen provider and confirm whether they accept an in-specie CGT-free share transfer of SIP shares, or whether you'll need to sell first.
Complete the transfer paperwork with your SIP administrator, who will need to release the shares to your ISA provider or arrange the sale for a pension contribution.
Keep a record of the transfer date and value for your own tax records, even though no CGT is due, in case HMRC asks for evidence later.
Double-check the transfer completes within the 90 days, not just that you've started the paperwork, since processing delays on the provider's end don't extend your deadline.
What Happens If You Miss the 90-Day Window?
If the 90 days pass before you transfer your SIP shares into an ISA or pension, the shares simply become ordinary personal shareholdings.
Any gain from that point is measured against your normal £3,000 annual capital gains tax exemption shares allowance for 2026/27, and anything above that is taxed at the standard Capital Gains Tax rates for shares.
You can still transfer the shares into an ISA or pension later, but you'll no longer get the automatic CGT-free treatment on the growth that happened while they sat in your name outside a wrapper.
A Quick Note Before You Act
This article explains how the SIP 90-day rule generally works, but it isn't personalised financial or tax advice. Pension and ISA rules, allowances, and tax rates can change, so confirm the current position with HMRC or a regulated financial adviser before making a transfer decision, especially if you're close to any allowance limits.
Frequently Asked Questions
Can I transfer only some of my SIP shares within the 90-day window, not all of them?
Yes. You can choose to transfer part of your holding into an ISA or pension and keep the rest as ordinary shares. Only the portion you transfer within 90 days gets the CGT-free treatment; the remainder is subject to normal Capital Gains Tax rules from the date it left the trustee.
Do I need to tell HMRC about a SIP-to-ISA transfer myself?
No separate notification is generally required for the transfer itself, since ISA providers and pension schemes handle the relevant reporting. However, you should keep your own records of the transfer date and value in case you're ever asked to demonstrate you acted within the 90-day window.
Does the 90-day rule reset if I leave my employer partway through?
No. The 90-day countdown is tied to the date the shares left the SIP trustee, not your employment status. If you leave your employer and your shares are released from the plan as a result, that release date typically starts the same 90-day clock.
Can I split my SIP shares between an ISA and a pension in the same 90-day window?
Yes, there's nothing preventing you from transferring part of your holding to an ISA and part to a pension, as long as both transfers are complete within the 90 days and you stay within each wrapper's annual contribution limit.
What if my ISA provider is slow to process the transfer and misses the deadline?
The 90-day deadline applies to when the transfer actually completes, not when you initiate it. Starting the process early, ideally with a few weeks' buffer, reduces the risk of a provider delay causing you to miss the CGT-free window.