Selling shares received for free

[Firefly]

Hi,

I am considering selling shares I received for free when a company I worked for in the past went public as I believe it is now a good time to sell these.

As I received these shares for free, if I sell them, is the income I receive taxed as Income Tax or Capital Gains tax? The shares have been held in the US for the past 10 years or so.

Thanks,
Firefly.

 

[mandelbrot]

The shares are an asset for CGT purposes so it's CGT that will apply to any chargeable gain on your sale of the shares.

A separate question is what the cost of the shares will be for CGT purposes - when you got the shares for free did you have to pay income tax on the value of the shares at the time? In fact, were you working here, or where, when you were given the shares?

 

[Firefly]

The shares are an asset for CGT purposes so it's CGT that will apply to any chargeable gain on your sale of the shares.

A separate question is what the cost of the shares will be for CGT purposes - when you got the shares for free did you have to pay income tax on the value of the shares at the time? In fact, were you working here, or where, when you were given the shares?

Thanks mandelbrot,

To be honest I can't remember if I paid tax when I received them I was working in Ireland when I received the shares.

Thanks again,
Firefly.

 

[mandelbrot]

Thanks mandelbrot,

To be honest I can't remember if I paid tax when I received them I was working in Ireland when I received the shares.

Thanks again,
Firefly.

You'll need to check, as presumably you will have (or should have anyway!) - unless it was an approved profit sharing scheme - you really need to find out what type of structure/arrangement you were given the shares under.

The reason being that whatever value you acquired them at, and were charged income tax on, will be treated as the cost for CGT purposes - you'll be liable for CGT on any increase in value since. I'm pretty sure we had a similar thread recently...

 

[Firefly]

You'll need to check, as presumably you will have (or should have anyway!) - unless it was an approved profit sharing scheme - you really need to find out what type of structure/arrangement you were given the shares under.

The reason being that whatever value you acquired them at, and were charged income tax on, will be treated as the cost for CGT purposes - you'll be liable for CGT on any increase in value since. I'm pretty sure we had a similar thread recently...

It was a profit share and I can check my statement to get the nominal value.

Thanks again!