Selling ESPP Shares - CGT

G

Grasshopper

Registered User
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I have participated in my companies ESPP scheme for the past 8 years. They afford a 15% reduction on the buy rates at either the start or end of the 12 month period, whichever was the lowest. It has performed really well in that time, so I have kept on investing and haven't touched it.
Now I plan to sell and will most likely pay off my car loan €33k and a chunk off my rental property €210k, with a tracker not doing so well now @ 2.15 above.

Have I got my calculations right: Costs basis €88k and can sell today for €125k. CGT would be €12,210 - €1270 = €10,940. Am I missing anything?
Am I mad to sell them all at once or should I sell over 3+ years to avail of the 1270 exemption? The stock price has performed very well, but I know that is no guarantee.

Also, another issue I need help with is that I have tried to apply for CGT access to pay on Revenue My Account. When I go in to Tax Registration Options there is not CGT option, only CAT. I also can't choose CGT as a taxation type in Maye a Payment section. Any ideas?

Thanks
 
CGT is under the ROS side, not My Account. Ring Revenue to get you set up for the ROS account to pay CGT. Don't bother with going through the enquiries section online, they don't seem to respond to those.

As for your CGT, gain is 37K, I would expect you to deduct the 1.27K first before you apply the 33%
e.g. (37000-1270 = 35730. 35730*0.33 = 11790.9 tax due)

See example from Revenue (https://www.revenue.ie/en/gains-gif...-an-asset/selling-or-disposing-of-shares.aspx)

If you are not selling all of your shares in one go (for the individual company), you might want to keep track of it somewhere so you know the FIFO rule and apply the correct market value it was bought at and current sold value for calculating CGT purpose. It is cleaner if you list it out for each time you bought, work out the CGT per FIFO rule until the amount of shares is met, then total it up. I find it easier personally.


Another one for you to consider, with respect to ESPP, did you already pay the tax for the gains from the discount? (i.e. ESPP cost you are buying at versus market value the day it was acquired). I know the below example states payroll handles it (I have a vague memory that was not always the case until recently). Since you mentioned you have 8 years worth of shares, you may just want to have a quick gander at your past payslips to make sure those are paid already, otherwise you might owe revenue a bit more than expected.

Employee Share Purchase Plans (ESPPs)

This page explains the taxation of Employee Share Purchase Plans (ESPPs)
www.revenue.ie www.revenue.ie

Example 1
Lucy works for an Irish branch of a US corporation. Under her employer's ESPP,
she can purchase shares in the company at a discounted price of 85% of the
market value. The ESPP is not treated as a share option plan.
Exchange Rate is €1 = $1.10.
She contributes the same amount each month for six months, which is held in
a non-interest-bearing account. Shares were trading at €54 ($60) at the
beginning of the six-month offer period on the stock exchange. At the end of
the six-month offer period, they are trading at €60 ($66).
At the end of the six months, her contributions are used to buy shares at €46
per share (85% of €54). She must pay tax on the discount amount of €14 per
share (€60 less €46). Her employer makes the deduction through the payroll
system.
The cost of acquisition for Capital Gains Tax (CGT) purposes will be €60 per
share.
Click to expand...
 
Yeah, the deduction was not automatic until very recently.

An old employer of mine and we all got contacted by revenue as there was a 5% discount on the employee share purchase scheme. To compound the problem, shares were bought monthly under our scheme. I only worked there for two years but I had to submit a RTSO1 form for each transaciton so 24 in total. The total amount was low but it was a pain
 
BigPineapple said:
CGT is under the ROS side, not My Account. Ring Revenue to get you set up for the ROS account to pay CGT. Don't bother with going through the enquiries section online, they don't seem to respond to those.

As for your CGT, gain is 37K, I would expect you to deduct the 1.27K first before you apply the 33%
e.g. (37000-1270 = 35730. 35730*0.33 = 11790.9 tax due)

See example from Revenue (https://www.revenue.ie/en/gains-gif...-an-asset/selling-or-disposing-of-shares.aspx)

If you are not selling all of your shares in one go (for the individual company), you might want to keep track of it somewhere so you know the FIFO rule and apply the correct market value it was bought at and current sold value for calculating CGT purpose. It is cleaner if you list it out for each time you bought, work out the CGT per FIFO rule until the amount of shares is met, then total it up. I find it easier personally.


Another one for you to consider, with respect to ESPP, did you already pay the tax for the gains from the discount? (i.e. ESPP cost you are buying at versus market value the day it was acquired). I know the below example states payroll handles it (I have a vague memory that was not always the case until recently). Since you mentioned you have 8 years worth of shares, you may just want to have a quick gander at your past payslips to make sure those are paid already, otherwise you might owe revenue a bit more than expected.

Employee Share Purchase Plans (ESPPs)

This page explains the taxation of Employee Share Purchase Plans (ESPPs)
www.revenue.ie www.revenue.ie
Click to expand...
You can pay CGT on MyAccount, you just need to be registered for CGT.
 
BigPineapple said:
CGT is under the ROS side, not My Account. Ring Revenue to get you set up for the ROS account to pay CGT. Don't bother with going through the enquiries section online, they don't seem to respond to those.

As for your CGT, gain is 37K, I would expect you to deduct the 1.27K first before you apply the 33%
e.g. (37000-1270 = 35730. 35730*0.33 = 11790.9 tax due)

See example from Revenue (https://www.revenue.ie/en/gains-gif...-an-asset/selling-or-disposing-of-shares.aspx)

If you are not selling all of your shares in one go (for the individual company), you might want to keep track of it somewhere so you know the FIFO rule and apply the correct market value it was bought at and current sold value for calculating CGT purpose. It is cleaner if you list it out for each time you bought, work out the CGT per FIFO rule until the amount of shares is met, then total it up. I find it easier personally.


Another one for you to consider, with respect to ESPP, did you already pay the tax for the gains from the discount? (i.e. ESPP cost you are buying at versus market value the day it was acquired). I know the below example states payroll handles it (I have a vague memory that was not always the case until recently). Since you mentioned you have 8 years worth of shares, you may just want to have a quick gander at your past payslips to make sure those are paid already, otherwise you might owe revenue a bit more than expected.

Employee Share Purchase Plans (ESPPs)

This page explains the taxation of Employee Share Purchase Plans (ESPPs)
www.revenue.ie www.revenue.ie
Click to expand...
Thanks for the response.
Yes I have paid tax on the gains from the reduction already. This goes through payroll. I am seriously considering selling all in one go, even if not making the most of the yearly exemption.
I did a bit more looking around and sent in a TR1 form to request CGT payment option be added to MyAccount.
 
Grasshopper said:
I did a bit more looking around and sent in a TR1 form to request CGT payment option be added to MyAccount.
Click to expand...
I don't believe it can be added according to the agent I spoke to few months ago, if you manage to get it in MyAccount instead of ROS, let me know.
 
BigPineapple said:
I have registered but the agent told me I have to be registered for ROS side few months ago.. maybe it is a new thing for MyAccount
Click to expand...
It's been on mine for years, since my First Active shares were bought. I assumed that once you were registered for CGT, it would show up.
 
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