Individual is an employee of a multi-national.
Shares with a value of less than €12,700 per annum were acquired under an APSS scheme in the last three years. General Irish Revenue rules can be found below. No income tax on the €12,700 of bonus and salary foregone per annum to purchase the shares at MV, which are then placed in a Trust. Shares held in trust for 3 years, then released to employee's broker, with no income tax, but if instruct the trustee to sell or transfer within 3 years, income tax is payable at 40%/20%.
www.revenue.ie
Basically, the company has been the subject of a takeover. All shareholders (including employees) are being carried along. There is a mixture of share for share exchange and cash. The expectation is that the shares received under the share for share exchange will go into the Trust and assume the notional purchase date of the original shares - hence after 3 years they will be released without creating an income tax liability.
However, Trustee is not clear on the position regarding the cash received as part of the exchange. Trustee doesn't want to hold the cash in the Trust - so cash will be distributed.
Individual does not want the cash and then have to pay 40%/20% IT, but can't refuse to take payment until the 3 years have elapsed.
Anyone any experience of Revenue granting a dispensation?
Edit: guidance suggests Trustee must use the cash to buy shares in the new company.
Shares with a value of less than €12,700 per annum were acquired under an APSS scheme in the last three years. General Irish Revenue rules can be found below. No income tax on the €12,700 of bonus and salary foregone per annum to purchase the shares at MV, which are then placed in a Trust. Shares held in trust for 3 years, then released to employee's broker, with no income tax, but if instruct the trustee to sell or transfer within 3 years, income tax is payable at 40%/20%.
Approved Profit-Sharing Schemes (APSS)
This page explains about Approved Profit-Sharing Schemes (APSS)
www.revenue.ie
Basically, the company has been the subject of a takeover. All shareholders (including employees) are being carried along. There is a mixture of share for share exchange and cash. The expectation is that the shares received under the share for share exchange will go into the Trust and assume the notional purchase date of the original shares - hence after 3 years they will be released without creating an income tax liability.
However, Trustee is not clear on the position regarding the cash received as part of the exchange. Trustee doesn't want to hold the cash in the Trust - so cash will be distributed.
Individual does not want the cash and then have to pay 40%/20% IT, but can't refuse to take payment until the 3 years have elapsed.
Anyone any experience of Revenue granting a dispensation?
Edit: guidance suggests Trustee must use the cash to buy shares in the new company.
Last edited: