$500k in US stock options - any way of avoiding CGT?

[rainforest84]

Hi everyone,

I'm fortunate to have $500K in stock options and RSUs. Currently, I work for an American company and have not touched these assets.

I have a question. I know that when I decide to sell, Shareworks will automatically deduct 52% taxes for the Irish government.

However, I also have an Italian bank account. If the money from Shareworks is transferred to my Italian bank, can I avoid paying the CGT ?

 

[BigPineapple]

Don't you need to be already paying the PRSI/USC/Income tax on those once it is vested? (Not when you sell).
As far as i understand, when you sell, you pay CGT on the gains difference between the value when it was vested and the value you sold at.

As for avoiding CGT, I presumed you would pay wherever you are considered tax resident? (Open to correction on this point)

 

[Brendan Burgess]

First things first.

You should sell the shares immediately as $500k in one company is too high risk. As you work for them the risk is even higher.

you can’t avoid tax by using a foreign account.

You might be able to leave Ireland for a year and become nonresident and then pay the cgt if any where you are resident. If that is an option then don’t sell the shares now and live with the risk of such a concentrated portfolio

 

[Hmm5673]

I have a question. I know that when I decide to sell, Shareworks will automatically deduct 52% taxes for the Irish government.

Do you know that, or just assume that? In general, when RSUs vest income tax/USC/PSRI must be paid immediately, via PAYE. It’s usually done via net settlement; if 100 RSUs vest, you get 48 shares.

 

[basilbrush]

You might be able to leave Ireland for a year and become nonresident and then pay the cgt if any where you are resident

I have read that you are also liable for CGT in Ireland when you are considered "ordinarily resident", which I think would be for three years after departure, not just one. You would probably need to investigate how that interacts with taxation in the destination country, though, such as whether there is a double taxation agreement, etc.

 

[Brendan Burgess]

Hi basil

You could well be right. I am not a tax expert. But there are only two ways to avoid CGT 1) To leave Ireland 2) To die.

Brendan

 

[torblednam]

If OP is not Irish domiciled then he'll only be liable on a remittance basis, on gains on assets that aren't Irish situated.

 

[Ciru75]

Hi basil

You could well be right. I am not a tax expert. But there are only two ways to avoid CGT 1) To leave Ireland 2) To die.

Brendan

3) Make a loss.

 

[rainforest84]

Hey all! Hope you can help me with this question.

I received a bunch of Non Qualified Stock Options (NQSOs) from my U.S. company before it went public. They’re now fully vested, and I noticed on Shareworks that if I exercise and sell on the same day (same day sale), they immediately withhold 52% in taxes + the cost of the exercise.

My question is: do I still need to pay CGT on top of this 52%, or is that already covered? This part is really confusing to me.

 

[ClubMan]

do I still need to pay CGT on top of this 52%

No.

In such a scenario the discount involved in the acquisition of the shares (in this case the full value if they're free?) is assessable for income tax etc.
Only if you held onto them and eventually sell them for a gain is the gain assessable for CGT.