Work share save program

[denisoleary]

I work for a company in Dublin, thats registered in the UK.
We have a sharesave program, save upto €500 a month for 3-5 years.

Before Brexit, this was a revenue approved program, so after the 5 years we pay USC and PRSI on the gain. We then pay CGT on selling the shares.
After brexit, this is a non-revenue approved scheme, now we owe PRSI at 40%, USC and PRSI on the taxable gain. We then pay CGT on selling the shares.
We still get a 20% discount when buying the shares.

Do you think i should just set the money aside myself and put into other savings and investments or go for this non-revenue approved sharesave program?

 

[ginslia]

While not as profitable post brexit, it’s still worth something to you. As long as there isn’t lots of hidden charges on the sale of the stock to wipe out the [discount after tax] gains.

if you sell immediately- cgt will be minimal as difference between the exercise price and sales price will be close to nil
if you hold, and price goes up, you pay cgt on difference between the sales price and exercise price (ie before the discount)
risk is if you hold, but share price goes down below the discounted price. While you won’t owe cgt, you will have lost money.

 

[ClubMan]

We still get a 20% discount when buying the shares.

If you sell immediately on exercise/share acquisition then you're guaranteed 20% gross (likely just under 10% net after tax/PRSI/USC and transaction costs and subject to minor currency exchange risks if you repatriate the cash quickly) on the money saved. Where else are you going to get a guaranteed return like that? Seems like a no-brainer to me to participate - unless you have very high interest debt (e.g. credit card at 10%+) that should be prioritised first. Normally these schemes have a 6 month savings/discounted share purchase period which would make the return equivalent to c. 20% net annualised. I'm not clear on what the applicable period is here.

 

[denisoleary]

Thanks for the advice