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Do software engineers really make that much?

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  • Options
    #62
    awec
    Administrators Posts: 53,732 Admin ✭✭✭✭✭awec


    beauf wrote: »
    When I use to got them they'd be for US stocks. You'd be dealing with a US broker. So you have to make a return here on them. Long time ago now.

    Whats changed in the rules?

    You still make a return here.

    In my experience, the BIK tax when you earn the shares in the more common, vesting model is handled automatically and will show up on your payslip. You have to make a CGT return when you sell them.

    With options though you are not liable for any tax until you actually exercise the option. Until you actually exercise them they're worthless. If you buy them at no cost, you will pay BIK on the full value of them. If you get them at a discount, you pay BIK on the difference between the price you paid and the market rate.

    Then you have to submit a CGT return as usual if you sell them.

    There are advantages/disadvantage to both models, but I think the biggest downside to options is if the value drops to below your guaranteed price they are totally worthless until the price rises above it again.


  • Options
    #63
    14ned
    Registered Users Posts: 768 ✭✭✭14ned


    awec wrote: »
    In my experience, the BIK tax when you earn the shares in the more common, vesting model is handled automatically and will show up on your payslip. You have to make a CGT return when you sell them.

    With options though you are not liable for any tax until you actually exercise the option. Until you actually exercise them they're worthless. If you buy them at no cost, you will pay BIK on the full value of them. If you get them at a discount, you pay BIK on the difference between the price you paid and the market rate.

    Foreign share options would fall under the Unapproved Share Options Scheme, whose tax treatment is described at https://www.revenue.ie/en/additional-incomes/employment-related-shares/unapproved-share-options.aspx.

    That tax treatment doesn't match what you said the tax treatment is, as far as I can tell. Are you referring to how the tax treatment once was?

    Niall


  • Options
    #64
    awec
    Administrators Posts: 53,732 Admin ✭✭✭✭✭awec


    14ned wrote: »
    Foreign share options would fall under the Unapproved Share Options Scheme, whose tax treatment is described at https://www.revenue.ie/en/additional-incomes/employment-related-shares/unapproved-share-options.aspx.

    That tax treatment doesn't match what you said the tax treatment is, as far as I can tell. Are you referring to how the tax treatment once was?

    Niall

    It does match, no? The long option has a bit extra but the gist of it is pretty much the same.


  • Options
    #65
    14ned
    Registered Users Posts: 768 ✭✭✭14ned


    awec wrote: »
    It does match, no? The long option has a bit extra but the gist of it is pretty much the same.

    True, for options whose date is within seven years from now, what you described is essentially right.

    However one must be extremely careful if the options have a date more than seven years from now. You would be advised to seek the advice of a tax consultant so you can structure your affairs. For example, you might want to become non-domiciled, so you only pay tax on income or capital remitted into the State at the moment of remittance.

    Niall


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