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Tax on shares in a startup

  • 21-04-2009 11:35am
    #1
    neiliusmaximus
    Registered Users, Registered Users 2 Posts: 30 ✭


    I need some advice on shares in a startup company. Hopefully this is the right forum for this query.

    The company was formed a few years ago and I was promised a small share in it for some work. A number of years on this is finally being organised. Can someone explain my tax obligations or point me in the direction of some guidelines?

    I'm being set a share allotment letter. Does this mean the shares are only being issued now, at the current company valuation?

    Does it make any difference that I was promised the shares years ago when the company value was almost zero?

    Any advice you can offer would be very welcome.


Comments

  • #2
    censuspro
    Registered Users, Registered Users 2 Posts: 881 ✭✭✭censuspro


    There will only be tax implications if you made a gain on the sale of the shares or you were gifted/inherited the shares and they had some value at the time you received them.

    The share allotment is sounds as though it's proof of ownership or proof of the transaction, keep it in a safe place.

    If you're really concerned, do a company search and get the ownership details or you could just request a copy from the accountants.


  • #3
    cosecretary
    Closed Accounts Posts: 31 ✭cosecretary


    Hi

    Capital Duty on the allotment of shares was abolished a few years ago. It could be that the company is alloting the shares at nominal value ie if they shares are 1.00 shares could be allotting for €1.00 regardless of their market value. Alternatively they may be allotting the shares at a premium. Just be careful to read the application letter carefully. I think the only tax issues you should consider will arise if you ever dispose of the shares ie cgt etc.

    It does appear the shares are only being allotted now if they are sending you a letter of applicatio but if you are in doubt do a company search on cro.ie shareholders are noted on annual returns which the company is required to file every year should clear things up for you for just €2.50.


  • #4
    Mr. Incognito
    Registered Users, Registered Users 2 Posts: 9,798 ✭✭✭Mr. Incognito


    when you gain the beneficial interest in the shares is the date you acquire them for CGT purposes- you will have to file returns for any dividends you receive and include the disposals if any in your tax return when they are disposed.

    easy peasey lemon squezy


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