I took the exercise and hold option with share options and deferred the tax for 7 yrs, shares at time would have made 10K gross with 4200K going to taxman and rest to me, now 7 years is up in 2007 and these shares are now worth 5K, with dollar rate poor against euro, If I sold them and got 5K it would all go to taxman,I know this is the risk I took but is there a way of claiming losses, or a tax adviser one might have used before who deals in share options,
Share options Exercised and held
- Thread starter dodo
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How much did you pay for the (presumably discounted) shares?
How much were they worth at the time of the exercise?
How much are they worth now?
If, once you sell the shares, you are carrying capital losses then you can offset those losses against future capital gains.
I am assuming that the current tax bill relates to (deferred) income tax liabilities on the market value at the time of exercise less the discounted share price? If so then there is no facility that I know of for mitigating this liability and it must be discharged in full regardless of any capital losses that you might incur in selling the shares.
How much were they worth at the time of the exercise?
How much are they worth now?
If, once you sell the shares, you are carrying capital losses then you can offset those losses against future capital gains.
I am assuming that the current tax bill relates to (deferred) income tax liabilities on the market value at the time of exercise less the discounted share price? If so then there is no facility that I know of for mitigating this liability and it must be discharged in full regardless of any capital losses that you might incur in selling the shares.
I think what you are saying is -- you have to pay the deferred income tax next year, and you need to sell the shares to pay this tax.
When you sell the shares, you will incur a capital loss which can be offset against any capital gains you might have from other sources, but not against the income tax due unfortunately. The other thing to consider is that between now and next year the shares could fall further in value -- and you will still have to pay the original income tax amount regardless! So by continuing to hold, you are taking a further risk!
If you believe that the market is seriously undervaluing your shares you could pay the income tax from savings or borrowings, and hold the shares until they recover. On the other hand, if you sell now, you get out with no net loss.
When you sell the shares, you will incur a capital loss which can be offset against any capital gains you might have from other sources, but not against the income tax due unfortunately. The other thing to consider is that between now and next year the shares could fall further in value -- and you will still have to pay the original income tax amount regardless! So by continuing to hold, you are taking a further risk!
If you believe that the market is seriously undervaluing your shares you could pay the income tax from savings or borrowings, and hold the shares until they recover. On the other hand, if you sell now, you get out with no net loss.
No, if I was an accountant it wouldn't be either of those! 
I agree with ClubMan though, you need to post more details, just to make sure you've calculated your tax liability correctly.
I can't tell you what to do, but I know what I would do if I could sell the shares now and break even, vs. selling them in a year and gambling on an unknown profit or loss. At least if you sell now, you can carry the capital loss forward to future years to offset against any future capital gains.
I agree with ClubMan though, you need to post more details, just to make sure you've calculated your tax liability correctly.I can't tell you what to do, but I know what I would do if I could sell the shares now and break even, vs. selling them in a year and gambling on an unknown profit or loss. At least if you sell now, you can carry the capital loss forward to future years to offset against any future capital gains.