Key Post Capital Gains Tax on sale of shares

Discussion in 'Tax' started by Brendan Burgess, Sep 19, 2009.

  1. 1stimebuyer

    1stimebuyer Registered User

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    I dont believe them to be revenue approved.
    The shares didnt come through company payroll (they were transferred directly from the share platform)

    It seems i need to fill out form RTS01 on the basis they were short option shares. I know the total profit, which the sheet calls for but I dont know the tax liability.

    I assume I'm due to pay income tax on it (all at the higher rate?)
    I assume I need to pay USC and PAYE?
    Is the allowance (1250) deductable from the taxable sum (or does it apply at all)

    What percentages do I work off? Say the profit was €10,000 - Can someone do a mock calculation for me?
     
  2. dub_nerd

    dub_nerd Frequent Poster

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  3. 1stimebuyer

    1stimebuyer Registered User

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    Sorry for the follow up dumb question.

    So basically is the vesting of shares the same as getting a bonus at the time. Assuming some of my monthly wage goes into the top rate of tax, does that mean I have to pay the top rate of tax on all shares and PRSI and USC - So ~48% tax?
     
  4. Gordon Gekko

    Gordon Gekko Frequent Poster

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    You were awarded unapproved share options with a 5 year term. The exercise price was their market value on the day that they were given to you.

    Say they were worth €5 a share back then and now they’re worth €7 a share. Within 30 days of exercise, you complete an RTSO1 form and pay 52% of €2 to Revenue (assuming you’re a top rate tax/USC payer). You also become obliged to submit a tax return for 2018 but it’s purely reporting as you’ve already paid the tax. That’s obviously a moot point if you’re already submitting tax returns.
     
  5. Returning

    Returning Registered User

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    My question also relates to an employee share purchase scheme, revenue-approved. I purchase shares every six months and sell them immediately. The gain is subsequently taxed at 52% + USC + PRSI through my company's payroll so am I eligible for CGT exemption of EUR 1270 and how do I apply for that, I don't normally do an annual return.
     
  6. dub_nerd

    dub_nerd Frequent Poster

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    Last edited: Jul 11, 2018
    No, you are exercising share options which is why the gain is taxed as income. You are not paying capital gains tax, therefore there is no capital gains exemption.

    EDIT: Just noticed you said it was an approved scheme. In that case you can avoid income tax by holding them for a certain amount of time (three years). But since you are selling them immediately you are liable to income tax. (I presume you mean 52% including USC and PRSI).
     
    Last edited: Jul 11, 2018
  7. Returning

    Returning Registered User

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    5
    Hi dub_nerd, yes it is an approved scheme. In January the net gain was taxed through my payroll at a rate of 60% which I took to mean 52% plus USC plus PRSI. Will check back on that.

    Revenue confirmed that a CGT exemption does apply but your reply makes more sense, that I am liable for income tax and not eligible for any exemption.