Taxes Shares sold in Ireland

M

Mary Robbins

Registered User
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3
Hi,

I was wondering if you can help me. I have worked in Ireland for almost 6 years and sold some options worth €10,000 and paid a 4% tax on them (deducted automatically). I sold them in April/May 2012 and left the country in May 2012, at the same time.

Problem is that Revenue is after me to pay taxes on those shares of 52% + penalty which is roughly €7000.

Can this be correct? I read that the tax is 30%, not 52%.

Thank you for your help!
 
Last edited:
Share options are taxable at your marginal rate of tax, I presume you were a higher rate taxpayer (41%).

PRSI @ 4% + Universal Social Charge (USC) @ 7% is also due.
 
Hi Sophrosyne,

Thanks a lot for your answer. Yes, my tax rate was 41% and in 2012 (when I sold the options) I only worked in Ireland and in that company for 4 months, I left in early May. So shouldn't the rate at which the taxes should be calculated be based on the earnings of those 4 months?

Sorry for the ignorance, but what is PSRI and USC? And why should I pay those?

Thanks!
 
Maybe you can help me calculate the taxes due: the total received is €10,818. I was taxed at 41%. But according to this example, I should pay 2% until €10.036 and 4% for the rest (€782).

Rates of USC First €10,036 2% -> €201
Next €5,980 4% -> €31
Over €16,016 7% - N/A

So the 41% of the total €10.818 is €4.435 plus USC (€232) is a total of €4.667.

Is this correct? Can someone please help me?

Thanks!
 
For the 6 years you were in Ireland, you would have paid Income Tax, Pay-related Social Insurance (PRSI) and (Universal Social Charge from 2011) on your salary – check your payslips.

Assessable proceeds from the exercise of share options are treated more or less as salary and are subject to the same charges.

If you only worked in Ireland for 4 months in 2012, you may be entitled to a repayment of some or all of the tax paid in that year.

To claim the refund, contact your former tax district – you can do this by email.

The email address can be found by entering your PPSN into the contact locator on the bottom right-hand side of this page
 
Our posts crossed.

USC applied to all of your income.

A portion of the USC rate bands would have been used up by whatever your gross salary was for the four months of 2012.
 
You may not be liable to tax in Ireland on the entire amount of the share option profit. It is not a simple calculation as it depends on when you became resident, when the options were granted and when they were vested. I'd suggest that you look at the Revenue guidance on the matter (Statement of Practice SP - IT/1/07) which can be found [broken link removed]

Also, as is referred to above, you should have 8 months tax credits and rate bands unused which may result in a lower tax rate of 52% - this all depends on the amounts and whether you have already got a tax refund. If you need assistance I suggest contacting a tax consultant who is familar with the taxation of share options for ex-pats as it is a fairly specialised area.
 
In the absence of information to the contrary, presumably Revenue would not be pursuing payment of the tax if the OP were not resident in Ireland at the time the option was granted, or where the share option was not granted in relation to the exercise of the duties of an employment in Ireland.
 
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