Share option and tax implications

D

damien666

Guest
Hi,

Over a number of years I have received Share Options from the company. The company is actually listed on the Finnish exchange.

Now that are woth something; I have questions on what tax to pay and how to pay it;
My basic understanding is that I have to pay tax on differece between the share price and the price at sell time.
And pay Tax on the profit.

Could anybody enlighten me...
Also it seems kind of unfair to be rewarded and tax'ed like this...

all the best
damo
 
Hi Damo - Why is it unfair that you pay tax on all your income, regardless of how your income is structured?

Anyway, in short - yes - your basic understanding is correct. Note that the tax liability only arises when you actually exercise your share options.
 
damien666 said:
My basic understanding is that I have to pay tax on differece between the share price and the price at sell time.

And pay Tax on the profit.
Click to expand...
These are the same thing. But perhaps your first point should be tax on the difference between the (usually discounted) exercise price and the market value at the time of the exercise? This is subject to income tax - see the [broken link removed]. Then when you sell the shares you are liable [broken link removed] on any gain that arises less the usual expenses and allowances. If you exercise and sell immediately then only income tax on the benefit in kind attributable to the discounted price applies.
Also it seems kind of unfair to be rewarded and tax'ed like this...
Click to expand...
Most [broken link removed] are subject to income tax and PRSI/health levy. In this case only tax applies so you are better off than some people who get benefits in a different form. If you don't like paying tax then you are under no obligation to exercise the options.
 
Hi

You also might want to check, to see if the options were granted under a Revenue "approved" scheme or not ... can make a difference between paying CGT or Income Tax rates !

Cheers

G>
 
Guys,

thanks for the responses.

By the way I have no problem paying tax....

I was given these shares when the company was not giving out salary increases. At the time they were not worth anything..now they are worth something.

all the best
DAmien
 
Just to note, you have 30 days to pay Relevant Tax on a Share Option.

You might just about get a receipt from Sarsfield House.
Most times I don't get one
It does not show on your P60
Your company do notify Revenue of your share options
 
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