
Article
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?
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Date published 16 Mar 2022 | Last updated 16 Mar 2022
This 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
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