selling us shares and tax question

[johnwilliams]

will shortly be selling shares i have in a us company .the form i have to submit to the us stock broker needs to know is there a tax treaty between ireland and the us?
if there is how does it work
if not what do i do next
these shares were given to me years ago to be redeemed after a certain amount of years if i remained in service of company ,time is up

 

[Ravima]

you should prpbably get some professional advice if the shares are worth something as you will have capital gains tax issues to sort out. any of the irish stockbrokers should be able to assist you.

 

[ClubMan]

will shortly be selling shares i have in a us company .the form i have to submit to the us stock broker needs to know is there a tax treaty between ireland and the us?
if there is how does it work

[broken link removed]

if not what do i do next
these shares were given to me years ago to be redeemed after a certain amount of years if i remained in service of company ,time is up

If you acquired the shares for nothing then chances are there was an income tax liability at that stage. This would be on the full market value of the shares at the time that you acquired them at no cost. You need to check if such a liability arose and if it is still outstanding. If you subsequently sell the shares at a gain relative to the market value at the time that you acquired them then the gain will be assessable for CGT.

Note that you probably need to complete and return a US IRS W8-BEN form to your broker to avoid US witholding taxes as a non US resident (if you are such).

What do you mean by "redeeming" the shares above? Are you sure that you're not talking about stock options that you are now considering exercising and then selling once you own the shares?

As mentioned above you should get independent, professional advice if unsure of your liabilities and obligations in this context.

 

[silvamuppet]

Clubman , correct me if I am wrong. BUt if these are in fact Stock Options as you suspect then johnwilliams' act of 'redeeming' them is in fact exercising the options. Assuming he doesn't sell them on the same day (or short term period?) then he isn't liable for income tax (potentially at the 42% rate).

Will just be CGT at 20% if he sells out after technically purchasing them?

 

[ClubMan]

Clubman , correct me if I am wrong. BUt if these are in fact Stock Options as you suspect then johnwilliams' act of 'redeeming' them is in fact exercising the options. Assuming he doesn't sell them on the same day (or short term period?) then he isn't liable for income tax (potentially at the 42% rate).

No - unless they are shares under a Revenue approved scheme where different tax treatment applies (e.g. deferral of income tax and/or CGT for a certain period) then income tax falls due on the discount (market value at the time of exercise minus discounted option price which could be zero here) at the time that they are exercised and is payable within 30 days via [broken link removed]. Note also that high rate tax is 41% as of Budget 2007.

Will just be CGT at 20% if he sells out after technically purchasing them?

CGT is also due if they are held and sold later at a gain.

As I say Revenue approved schemes may have different tax treatment but that's definitely how it works for non Revenue approved schemes which are common.