# Does my ESPP make me self assessed?



## ClubMan (4 Jul 2006)

According to the [broken link removed]:


> A PAYE employee who exercises a share option and pays Relevant Tax on a Share Option will be registered as a self
> assessed person for the tax year in which the share option is exercised. A Return of Income will be forwarded after the end of
> the tax year and the Return should be completed with details of all taxable income for the tax year, including the gain on the
> share option.


 According to [broken link removed]:


> * Non-PAYE income less than €50,000 gross*
> 
> An individual who is in receipt of income chargeable to tax under the PAYE system but who is also in receipt of income from other non-PAYE sources will not be regarded as a "chargeable person" if the total gross income from all non-PAYE sources is less than €50,000 and the net assessable income is less than €3,174 and the income is coded against PAYE tax credits.
> There is no change to the current practice in relation to individuals who fall within this category, provided they have assessable non-PAYE income of less than €3,174. These individuals can continue to have the liability on such income effectively assessed within PAYE by means of coding in the income against their tax credits.
> ...


 The additional non _PAYE _income tax assessable gain arising from the _ESPP _discounted share options was less than €3,174. I filed and paid the income tax due within 30 days of each c. 6 monthly purchase period via an _RTSO1 _return/payment.

Am I considered self assessable as a result of this? I have not received a _Return Of Income _from _Revenue _in respect of 2005 so far. I'm not clear on what, if anything, I need to do in this context.


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## ClubMan (5 Jul 2006)

*Re: Does my ESOP make me self assessed?*

Can anybody explain what this means:


> These individuals can continue to have the liability on such income effectively assessed within PAYE by means of coding in the income against their tax credits.


 Does _"coding the income against their tax credits"_ mean that the income must be declared (in advance) and tax credits adjusted appropriately to take account of this income? Since the income will not be known precisely in advance does one simply estimate the potential earnings and inform _Revenue _in order to obtain a revised statement of tax credits?


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## Brendan Burgess (6 Jul 2006)

*Re: Does my ESOP make me self assessed?*

Hi ClubMan

Yes. That's what coding means. 

They estimate your non PAYE income and adjust your tax credits. AT the end of the year you do a return and settle any difference. 

Brendan


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## ClubMan (6 Jul 2006)

Thanks. I actually meant _ESPP _and not _ESOP _and have edited the thread accordingly now.


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## noel 2006 (6 Jul 2006)

In the tax briefing above, can anyone clarify what is meant by "net assessable income"?


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## ClubMan (6 Jul 2006)

I presume for self employed people (say sole traders) it means profit from the business after allowable expenses have been deducted with whatever of the remainder that is taken as income being assessable for income tax?


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## ClubMan (7 Jul 2006)

My _ESPP _provides for at least a 15% income tax assessable discount on shares that are purchased. The gain could be higher as it is based on the lower of the market price at the start or end of the purchase period, whichever is lower. Obviously _CGT _could also be an issue if instead exercising and selling immediately the options are exercised and the shares held and later sold to yield a capital gain. One can contrinbute up to 15% of gross subject to an annual cap of US$10K (say around €8K). For the purposes of "coding the (estimated) income against my tax credits" I should be able to estimate that I will earn c. €8K x 15% = €1,200 additional income and just inform _Revenue _of this, get an adjusted statement of tax credits and then declare the actual amount that arises at year end?


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## Brendan Burgess (7 Jul 2006)

That's what I would do ClubMan.


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## CharlieC (12 Jul 2006)

ClubMan said:
			
		

> get an adjusted statement of tax credits and then declare the actual amount that arises at year end?


 
Hi Clubman, do you believe you are entitled to any additional tax credits?.

I am PAYE, and I have been exercising shares for the last 2 years. They were all options- I didn't pay for them.
I submitted the RTOS and 42% on any gain about 6 times with my PPS on the back of the cheque
I have never been requested to submit any year end return

It is only recently Revenue have even issued me a receipt. It does not appear on my P60.


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## ClubMan (12 Jul 2006)

CharlieC said:
			
		

> Hi Clubman, do you believe you are entitled to any additional tax credits?.


 No - the opposite. Rather than having to go through the hassle of filing and paying the tax due via an _RTSO1 _I'd prefer if they just *reduced *my tax credits to account for the estimated the tax due and then I can balance it out at the end of the year.


> I am PAYE, and I have been exercising shares for the last 2 years. They were all options- I didn't pay for them.
> I submitted the RTOS and 42% on any gain about 6 times with my PPS on the back of the cheque
> I have never been requested to submit any year end return


 That's what I did for last year for the two purchase periods of my _ESPP_. The first year that I have been involved with it. 


> It is only recently Revenue have even issued me a receipt. It does not appear on my P60.


 I received receipts both times. The income doesn not appear on my _P60_ either and I would not expect it to since it is not actually direct income from the job.


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## diroche (12 Jul 2006)

Hi Clubman,

I had discussed this with the revenue regarding rental property income for a PAYE worker. As my income was approx €2k, I was able to adjust my paye tax credits to pay it. Also, I did not have to complete a tax return. It is instances like this that your opening quote from the tax briefing relates to.

The treatment of share options is different for two reasons:
1. you are required to pay the tax due in full within 30 days, while adjusting your credits would involve a gradual payment over the rest of the tax year.
2. exercising share options is one of the activities that triggers the rerquirement to complete a tax return for that year, similiar to transactions giving rise to a capital gains tax liability, for example.


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## ClubMan (12 Jul 2006)

diroche said:
			
		

> The treatment of share options is different for two reasons:
> 1. you are required to pay the tax due in full within 30 days, while adjusting your credits would involve a gradual payment over the rest of the tax year.
> 2. exercising share options is one of the activities that triggers the rerquirement to complete a tax return for that year, similiar to transactions giving rise to a capital gains tax liability, for example.


Yes - but the tax briefing above suggests that the requirement for _RTSO1_/self assessment can be dispensed with in favour of adjusted tax credits in certain circumstances. Anyway, I'm going to write to _Revenue _and ask them directly to see what they have to say about it.


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## CharlieC (12 Jul 2006)

ClubMan said:
			
		

> No - the opposite. Rather than having to go through the hassle of filing and paying the tax due via an _RTSO1 _I'd prefer if they just *reduced *my tax credits to account for the estimated the tax due and then I can balance it out at the end of the year.
> .


 
Thanks makes sense now, I think I will continue to send in the RTOS


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## diroche (25 Jul 2006)

hi,

this is more of a property question, but still related to the tax briefing links you have above so apologies for not starting a new thread for it...

i have investment property income that has been under €3k for the last two years and had it taxed through adjusting my paye allowances.

for 2005 i have approx €7k net rental income on gross income of €30k (i.e. in excess of the net limit, but not the gross one of €50k per the tax briefing) and my questions are:
1. does this mean i will have to complete a form11 return? 
2. would it be possible for me to complete a form 12 instead, as it is a far simpler form?
3. will i now be liable to self employed prsi in addition to the health levy on unearned income (as rent is classified for paye workers)?


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## zephyro (19 Oct 2006)

ClubMan said:


> I filed and paid the income tax due within 30 days of each c. 6 monthly purchase period via an _RTSO1 _return/payment.



ClubMan,

 I also use Form RTS01 to pay income tax on ESPP shares every month. FWIW though I also got a letter from Revenue a few months ago to say I had been registered as self-assessed for 2004 and requesting the submission of Form 11 for that year. I don't know for certain but the only reason I can think of that I was registered as self-assessed is that Revenue got the details of all employees in my company who participated in the ESPP scheme in that year.


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## ClubMan (19 Oct 2006)

Thanks - I never received such a letter and my letter to _Revenue _months ago asking them about collecting the tax via _PAYE _(which seems to be an option once the non _PAYE _income is below c. €3K) elicited no response from them...


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