Exercise and Sell share options - tax implications?

B

bandsman04

Guest
Hi,

Ive got company stock options priced at €4,700. The current market price for these is €8,600.

If i sold them in the morning, how much tax would I have to pay out, and when would I have to pay it to the taxman.

My salary is currently being taxed in the 42% bracket and I have not had any other shares dealings this year.

Thanks
Bandsman04
 
Assuming that you have unexercised options granted at €4,700 for shares that are now worth €8,600 then if you exercise and sell you will be liable for income tax of 42% on €8,600 - €4,700. Not sure of you are also liable for PRSI (4%) and/or health levy (2%).
 
Ive heard that you are allowed the first €1270 tax free and the rest is taxed. Is this correct
 
I'm afraid not. The figure you mention is the capital gains allowance and this is taxed as income (the company are effectively giving you difference between the exercise price and the market price). If you exercise and hold the shares, then any further gains on the €8,600 would be taxed as capital gains (at 20%) the first €1,270 of which in any given year is tax free.
 
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