Espp

[tolkarovers]

Hi,
I participate in my Employee share purchase scheme and I was wondering if it is possible to deduct the fees charged by the broker when you sell the shares, from the profit BEFORE you pay the tax?
Thanks

 

[ClubMan]

Depends - when you exercise the shares then you are liable for income tax on the difference between the market value at the time and the discounted option price. There is no allowance for deduction of expenses when calculating this figure. If you then hold and eventually sell the shares for a profit over and above the market price at the time you exercised them then that gain is assessable for CGT and you can deduct allowable expenses (such as broker fees) when calculating your liability. If you exercise and sell in one go then you are liable for income tax only. This is the general approach to ESPP schemes. If yours is a Revenue approved or otherwise tax deferred/exempt scheme then the tax treatment might be different.

 

[bazermc]

I agree clubman if there is an income tax charge on exercise - if its an unapproved scheme you will not be allowed a dedcution for brokerage fees but you will get a cgt deduction on diposal regardless of whether its approved or unapproved

 

[tolkarovers]

thanks