Questions on Stock Options sale taxes

H

holaquetal

Registered User
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Hi there,

Few questions on taxing stock options sale, didn't find them in other threads:

1. Net capital gain from selling stock options does not include the transaction fees. Is the taxable amount based on the capital gain after fees or before fees?

2. I missed the 30 days deadline to file RTS01 after few sales done in 2014. My overall capital gains in 2014 are still under 1,270 euros. What should I do now? Should I still file RTS01, despite being under 1,270 eur of net gain and despite having missed the 30 days window?

Thanks,
 
1. When working out your capital gain any selling expenses can be deducted such as transactions fees.
2. The RTSO1 is an income tax return and has nothing to do with capital gains. The €1,270 is therefore irrelevant. This return must be filed and you will also need to file a Form 11 next year for 2014.
 
Thanks for your reply

1 is clear. On 2: I consulted a revenue official and she was saying that money gained from selling stock options is a capital gain. Therefore, I read on revenue.ie tjat the 1270 threshold applies. I am now confused :( would u mind developping a bit?

thanks again,
 
An RTSO1 needs to be completed when you exercise your share options. This form returns the income tax, USC and PRSI on the difference between the exercise price and the market value of the shares.

Most employees sell the shares the same day they exercise the option. In these cases there are two different transactions - the exercise of the option and the sale of the shares. The exercise of the option triggers an income tax liability as set out above. The sale of the shares is a capital item and capital gains tax is paid on the difference between the sales price and the market value of the shares. As this is likely to be the same price if done on the same day no capital gains tax liability will arise.
 
hi, sorry to hijack this thread but i have a similar question

i sold share options in May and missed the 30 day period to file with the collector general.

will revenue definitely charge interest?
what interest rate do they charge?

thanks
 
Revenue normally charge interest. There are not suppose to have any leeway in not charging interest as it is a statutory charge.

The interest rate is 0.0219% per day.

You can file the return without interest and Revenue will send out request if interest is being applied.

It is important to remember to file your income tax return for 2014 also although you can't file this until January 2015.
 
thanks srase,

the cash has been sat in my current account and accrued zero interest

if i send them a statement will that sway them?

the amount is nearly 100k and its 130 days overdue so is the calculation:

100k x 0.0219 x 130 days = 2847!!!
 
Calculation is correct. works out at around 8% per year.

The fact that the money earned no deposit interest will not have any influence on Revenue.

The legislation states that interest "shall" be charged so there is no discretion given to Revenue.

As I say you can submit the return and wait for Revenue to assess any interest on the liability.
 
Is the interest only charged on the amount that would have been payable to revenue in the first place?
 
yes interest is on the tax liability. I assumes the 100k was liability and not value of shares
 
Yes, gain was c. 200k and the tax c.100k

I'm not advocating fraud but how will revenue know the actual date exercised?
 
Your employer submits an annual return (RSS1) detailing dates of share options that are exercised by employees.
 
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