Capital Gains Tax Allowance on Share Scheme sale

[ShaneMc]

Hi.

If I receive say 5000EUR worth of shares from my job and sell them, do I have to pay tax of 41% on all of it or can i avail of the 1270 CGT on it?

Thanks,

 

[ClubMan]

Do you get the shares for free or for a discounted price? If you get them for free or a discounted price then you are liable for income tax (possibly payable within 30 days) on the difference between that and the market value at the time you acquire them. If you hold and sell them later for a gain above the market price at that time then you are also liable for CGT and can avail of the usual allowances/reliefs.

 

[ShaneMc]

Thanks Clubman,

I got them for free so I got them for free so I guess i pay 41% (+6% PRSI) on the original amount and 20% CGT on any gain above that price?

 

[ClubMan]

If the share grant is considered a BIK then you would indeed be liable for income tax, PRSI (4%) and health levy (2%) on the full value when you receive them (i.e. you will have a tax liability even if you don't dispose of them) and I think that the employer should be deducting these through payroll. If they are free shares through some sort of share option scheme then PRSI/health levy may not apply but just income tax on a self declared basis (see [broken link removed]). If you hold the shares and eventually sell them for a gain then CGT applies to the gain. I am not a tax expert so you should really get independent, professional advice.