How to pay tax on Share Options
Have you received share options from your employer and not sure what to do about your tax? Here we look at what tax you need to pay on Share Options and when …
So firstly, what are share options?
What type of share schemes are there?
- Approved Share Option Schemes – These are schemes which have been reviewed and approved by the Revenue Commissioners. If you are under such a scheme the Income Tax you need to pay is generally deducted via your payroll. If you are unsure if you are on an Approved Scheme you could ask your HR department or you can see a current list of the Approved Schemes is available on the Revenue website.
- Unapproved Share Option Schemes – These are essentially all other share option schemes which do not qualify as approved share option schemes. Any Income Tax which arises in respect of an Unapproved Share Option Scheme must be calculated and paid over to Revenue by you - the employee. Note being part of an Unapproved Scheme is not a negative thing, in fact if your employer wants to grant you options worth more than €12,700 they have to do it under an Unapproved Scheme.
Tax on Share Options
- Income tax when you receive/trigger the option to buy the shares and
- Capital Gains Tax when you sell the shares on to somebody else.
1. Income Tax on Share Options
What happens if I received shares under an Approved Scheme?
What income tax do you need to pay under an unapproved share option scheme and when?
2. Capital Gains Tax
So what happens when I eventually sell the shares?
When is the CGT due?
We can help
Book your FREE Initial Consultation
Date published 16 Mar 2022 | Last updated 16 Mar 2022This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
Choose the right accounting firm for you
Running your own business can be challenging so why not let TaxAssist Accountants manage your tax, accounting, bookkeeping and payroll needs? If you are not receiving the service you deserve from your accountant, then perhaps it’s time to make the switch?
Local business focus
We specialise in supporting independent businesses and work with over 6,246 clients. Each TaxAssist Accountant runs their own business, and are passionate about supporting you.
Come and meet us
We enjoy talking to business owners and self-employed professionals who are looking to get the most out of their accountant. You can visit us at any of our 23 locations, meet with us online through video call software, or talk to us by telephone.
Switching is simple
Changing accountants is easier than you might think. There are no tax implications and you can switch at any time in the year and our team will guide you through the process for a smooth transition.
See how TaxAssist Accountants can help you with a free, no obligation consultation