Capital Gains tax on non matured shares.

[cornholio88]

Got into financial difficulty in 2008. Ended up have to sell shares which i had gotten through a group scheme but that had not matured. Revenue sent me out a balancing statement for 2008 and I'm left with a bill of €4000 give or take some small change. The actual ammount of the shares that I sold was roughhly €11k this was a loss of €3k on when I bought the shares. I earned 38k from working for 2008. The figure that I have been quoted seems way out I have tried and tried but cannot get my head around it. I have written to the revenue appealing the ammount. I'm at my wits end with this have never had any dealings with revenue or the like before and want to get the matter sorted. Any advice would be greatly appreciated.

 

[Domo]

Was this a Save as You Earn (SAYE) Scheme?

If you exercise your shares within the three year time limit a charge to tax arises.

You should ask the Revenue for their calculation of the taxable income. You will be charged tax on the difference between the market value of the shares and the amount you paid for them at the date you purchased them (in effect, treated as a benefit in kind).

 

[cornholio88]

It was a bonus match scheme by whitch the company match a bonus up to 8% of gross pay into shares. Thanks for the reply.

 

[Gervan]

There are several different share option / subscription / profit sharing schemes. It's possible that by seeling your shares early the Capital Gains treatment no longer applied, and you had an income tax liability.

 

[cornholio88]

It is down as capital gains. I am very worried about the whole issue. I have appealed it as they were looking for payment within 30 days. To put it mildly this has left me very worried. What is the normal dealing with one of these cases?? Will it involve court or a conviction of some kind??

 

[Domo]

What grounds did you appeal on?
If the Revenue have calculated it correcctly you would have no grounds for appeal.

However, if the liability is due and you are having difficulty paying the tax liability, the Revenue may consider a repayment plan.

It could be worth your while taking professional advice to confirm the liability, and to perhaps get help with the negotiations for payment of the liability with the Revenue.

 

[galwegian44]

Cornholio88,

This sounds like an ESOP Scheme and if you sold the shares before they matured you would be liable for income tax as the shares were purchased with your Gross Pay, rather than Net. The earlier you sold in that 3 year period, the more you will have to pay.

Also, you could be liable for Capital gains Tax if the share price you sold at was more than the share price you purchased at. The purchase price will be on the Share Appropriation document you received from the company managing the scheme for your employer.

I would agree with previous suggestions around contacting the Revenue and looking for a breakdown and you could also contact the company managing the scheme to at least get the details and maybe some advice also.

Good luck.

It is down as capital gains. I am very worried about the whole issue. I have appealed it as they were looking for payment within 30 days. To put it mildly this has left me very worried. What is the normal dealing with one of these cases?? Will it involve court or a conviction of some kind??