Company share scheme

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Wexfordman

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Hi,


If you are in a revenue approved share scheme with your employer, and your employer gets bought out for cash, can anyone tell me how that would affect un-matured shares ?

I.e:- Would we be forced to sell the un-matured shares ?
Would we then have to pay income tax on the early sale of the shares ?
Would we also have to pay CGT on top of income tax on the shares, (does this mean we could lose 60% to the taxman ?)

Has anyone been in thhis situation before ?

Regards,
Wexfordman
 
It would depend on the agreement between the employer and the new owners, from what I can see from your details is that you have options in shares and not shares themselves. the new owners may have made provision to buy the options and may just leave them in place.

If you have to sell the options back you will only be taxed at CGT and not IT. 20%
 
Thanks for the reply.

No, we actually have shares, and not share options!!!. THe shares are held in trust for three years until they "mature", when we can then sell them and be liable for CGT only. Any dividends due on the shares are payed directly to us, whether they have matured or not.

Does this change things ?

Regards,
Wexfordman
 
I see, I cant personally get my head around a maturing share tbh.

If the owner has sold his majority shareholding its up to the new owner to decide if they want to buy out the employees shares, I cant see why they would bother tbh.

The only changes I can see is if the new owner decides to buy them, or stops paying a dividend.
 
Yeah, but the employees are shareholders!! If a cash offer is made for the company, and accepted by the majority of shareholders, does this not mean that all shares have to be sold ?

If that is the case, then emplyees would have to sell shares that have not passed the 3 year revenue timeline to make them exempt from income tax, therefore, we would have to pay income tax on the shares. I may be way off the mark here, or possible not explaining my questiio properly, sorry....

Wexfordman
 
Wexfordman said:
Yeah, but the employees are shareholders!! If a cash offer is made for the company, and accepted by the majority of shareholders, does this not mean that all shares have to be sold ?
Click to expand...

I understand the employees are shareholders, but who has the majority of shares, if the owner has 51% or more an outside buyer can buy them and control the company, they dont have to buy the employees shares. there are different rules if its a PLC.

What is the employers share and whats the employees share?
 
I'd guess that there may well be an income tax liability (even though I know you didn't initiate the sale of shares yourself), but you'll probably need to check with Revenue and/or your scheme trustees to be sure. Do post back the outcome so others can benefit.
 
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