A low rate taxpayer would only be liable for 20% unless the nominal income attributable to the discount would push them into the 41% bracket?On the basis that they were not part of a Revenue approved option scheme, you are liable to tax at 41% on the difference between the market value and the price you pay on exercise date (no prsi/levies).
I never hard to do that.You must also submit a tax return (form 12) for that year by October 31 of the next year.
But you are still liable for the income tax on the discount as above.If you hold the shares for a while, you may be subject to CGT on a later sale.
A low rate taxpayer would only be liable for 20% unless the nominal income attributable to the discount would push them into the 41% bracket?
Ah - I see - thanks for the clarification.You are required to make the payment at 41% within 30 days unless you get prior approval to pay at the lower rate (section 128B).
If you pay at too high a rate, you will get a refund when you submit your return.
Didn't they alter this such that such (nominal) income under c. €3,175 could be dealt with via the PAYE system if the taxpayer opted for it? I wrote to Revenue asking about this but never heard anything back from them. I never made a return and have had dealings with Revenue since so I am not going to worry about it now. All taxes due have been paid via RTSO1s by the way and balancing statements have also been issued for the relevant years.Section 128 states that a person subject to tax on the exercise of share options becomes a chargeable person (ie required to make a tax return) unless the tax is gathered through their tax credits (which doesn't happen since 128B was enacted) or they get written notice from the Inspector exempting them from making a return.
You must also submit a tax return (form 12) for that year by October 31 of the next year.
Hmmm...now I'm confused.
I sold some stock options this year and was told by Revenue that I will have to make a return by Oct 2008 for this year. Do I use Form 11 or Form 12 ? All other income is PAYE.
But nominal income attributable to discounted stock option/purchase schemes is, by definition, non PAYE income isn't it? I thought that you could use Form 12 if such non PAYE income was under the c. €3,175 limit but otherwise you were treated as self assessed (even if most of your income was still PAYE)?
If you exercised and sold immediately then chances are you did not make any capital gain so CGT would not be an issue at all. What would be an issue though is income tax on the nominal income attributable to any discounted option price (compared to the market value at the time) and, as explained above, this needs to be remitted via Form RTSO1 within 30 days unless the scheme is Revenue approved and benefits from other tax treatment. In my experience Revnue will not throw the book at you for being late with the RTSO1. I was late with one because initially my employer was incorrectly deducting BIK tax (and PRSI - wrong twice!) in respect of the ESPP via payroll and only later did I discover that this was wrong and that the RTSO1 within 30 days was the way to go. So I was late but Revenue seemed happy enough when I sorted it out late.I have exercised a similar stock option of 500 shares from my employer (UK based). Shares were sold in London Stock Exchange & a sterling cheque was forwarded for the amount gained. Do I have to pay any CGT on it before 30 days period from the date I received the cheque? I think I might have just exceeded the 30 day period!
On the basis that they were not part of a Revenue approved option scheme, you are liable to tax at 41% on the difference between the market value and the price you pay on exercise date (no prsi/levies).
This tax, together with form RTS01 must be submitted to the Collector General within 30 days of the exercise. You must also submit a tax return (form 12) for that year by October 31 of the next year.
If you hold the shares for a while, you may be subject to CGT on a later sale. For CGT purposes, the base cost will be the market value on the date of exercise (plus any additional costs of acquistion such as stamp duty).
Del3D,
as per a previous post here: