Stock Appreciation Rights

I sold some stock appreciation rights earlier this year, and I've received some contradictory advice concerning preliminary tax from my accountant.

The first occasion I met him he recommended I pay the preliminary tax due based on 90% of the 2017 amount due. However his office has subsequently completed my 2016 return, and have advised that I should instead pay based on a figure of 100% of the tax due for 2016. There is a significant difference between both amounts, and while it would be helpful to go with the lower 2016 figure from a cashflow standpoint, the last thing I want is to get on the wrong side of the Revenue.

Does anyone have any experience in regard to making a choice when paying preliminary tax?

Prelim Tax should be the lower of

1. 100% of 2016 liability
2. 90% of 2017 liability

Obviously you don’t know what 2017 is going to be so pretty much every accountant will recommend the “100% of 2016” route to be on the safe side and avoid any interest charges whatsoever. That would be the standard recommendation to all taxpayers.

At the end of the day though it’s up to the taxpayer to decide so if you want to pay the higher figure then absolutely do so. Just contact your accountant’s office and tell them. They will be more than happy to go with your wishes.