# I defered payment on stock options 7 years back and I am now about to pay the defered



## dodo (20 Apr 2010)

I defered payment on stock options 7 years back and I am now about to pay the defered tax in the next few week, These where American shares so shares in dollars,now the tax owed back in 2001 was calcalutaed into euro by Irish revenue as it should be. Now I was wondering due to these particular share actually dropping in value now from 2002 and also the dollar having lost about 30-40% in value since 2001.Is there any loss I can claim for , quick summary below.

2001 shares worth 20K $ tax due $9,600 -euro 8352 roughly, now that 8352 euro is $11,240 
so tax owed is more per dollar, so I lose out , just wondering is there any way I could claim for loss, or could you recommend someone who may deal in this type of issue


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## WaterSprite (20 Apr 2010)

You can carry the currency loss forward as a normal capital loss (assuming you sold the shares at a worse USD exchange rate and actually made a loss).  

If you haven't sold the shares or written them off, then there's no loss realised & you just pay the tax (income tax I presume)  based on the USD rate in effect on the date you exercised share options.  The market value on the date of exercise (at the USD rate in effect on that date) becomes your base price for CGT purposes in EUR.  Then when you sell, use the exchange rate you get when you sell to convert to EUR and the difference is your gain/loss.

If you just exercised the options and sold them on the same day way back when, then there's no loss incurred and you pay tax at the rate on the date you exercised/sold.

This has come up before in the opposite sense - in that a currency gain is a capital gain for CGT purposes.


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## dodo (21 Apr 2010)

*share options*

The share options where exercised back in 2001 into shares not cash, exchange rate was 1$ = 1.10E, so the exchange rate now is the other way, 1$ = .75E in 2010, so I will be exchanging this week, See the tax liabilty back in 2001 was 8352E and that has not changed ,so still 8352E in 2010. The issue is because I just sold the shares and they are in Dollars that when I go to sell them I have to sell more shares to cover the tax liabilty due to the exchange rate decline in the dollar.
No matter what the taxman must get his 8352E, so can I make any sort of a claim for loss


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## WaterSprite (21 Apr 2010)

I think I answered that question in the second paragraph of my reply.


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## dodo (22 Apr 2010)

Thanks for taking time to reply but a little confused,
2nd papagraph
If you haven't sold the shares or written them off, then there's no loss realised & you just pay the tax (income tax I presume) based on the USD rate in effect on the date you exercised share options. The market value on the date of exercise (at the USD rate in effect on that date) becomes your base price for CGT purposes in EUR. Then when you sell, use the exchange rate you get when you sell to convert to EUR and the difference is your gain/loss.
If sahres wher excercised in 2001 then I use that rate to calcaulate tax,
but when I sold them in 2010 and got cash funds for them,if I made loss from them then I can write some of this of ?
Would you by any chance know an accoutant that has dealt in this type of transaction as I would like to use his services, much appricated


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## WaterSprite (4 May 2010)

If you exercised shares at $2 each on a date when they were worth $10 each, you pay income tax on the $8 difference.  That is converted into euro on the date you exercised and you have to pay that tax at that conversion rate.  That liability has been deferred for 7 years but is still fixed.

Let's say that you had 100 shares at a market value of $10 each at that point (the date of exercise).

Let's say those 100 shares were worth EUR1,000 at the date of exercise (a forex of 1:1).

You then (in e.g. 2009) sell all the shares at US$12 each, but, because of the dip in the dollar, you only make €900.  That means that you have a capital loss of €100 that you can carry forward against other capital losses.  This is separate from your income tax gain back when you exercised, which you still have to pay.

I don't have details of an accountant who can advise on this matter but a search will throw up some names.


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