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Tax of Employee Share Schemes in US Dollars

  • 28-09-2009 1:40pm
    #1
    leinsterman
    Registered Users, Registered Users 2 Posts: 1,584 ✭✭✭


    I'm in quite a complex situation in relation to an Employee Share Scheme which is in US Dollars from my NASDAQ quoted company. Basically is get shares at a discount and as such I am liable for income tax on the discounted part.

    I did a search and found this thread on restricted stock - Resticted Stock Discussion

    I have some questions as follows -

    1. What about costs, gains and losses on foreign exchange in the process of share dealing in Employee Schemes - Are these allowable for the purposes of calculating CGT?
    2. I understand I must use RTSO1 and pay income tax within 30 days based on vest price and use an exchange rate on the day of issue but: Since I have already paid income tax on the discounted part and indeed on the money used to buy the shares in the first place. For the purposes of determining CGT when I sell the shares do I calculate based on -
      • The discounted price I paid for the shares including my allowable costs (income tax, forex costs/gains/losses, share dealing costs) on the day of vesting or ...
      • The actual market price at close on the day of vesting of the shares since I am paying income tax on the discount anyway or ...
      • Something else?
    3. My situation is further complicated by having also received Restricted Stock (i.e. for free). I am seriously considering employing the use of a tax expert but I am concerned that not every tax expert will have the knowledge I need to ensure I make the correct return. Indeed I am also concious of the fact the this is an imprecise art and even different tax inspectors at the revenue office would give different answers to the above questions. What do people think of this comment?
    Tagged:


Comments

  • #2
    TaxingTimes
    Registered Users, Registered Users 2 Posts: 145 ✭✭TaxingTimes


    The income tax payable by you will be based on the value of the shares at the date you received them, less the amount you paid for them.

    You need to pay tax at 41% 30 days after the vesting date, using the exchange rate on that date of vest, and send this with your RTSO1.

    When you sell them in the future, you will be lialbe to CGT on the proseeds (using the exchange rate for the date of disposal), less the value used for Income tax calculation purposes, less the cost of disposal (stockbrokers fees etc).

    There is no provision for any exchange rate losses or gains in relation to personal transactions. No deduction can be made for the Income tax you paid either.

    PM me if you need more information


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