Motorola Shares sold - Taxed 30% - WTF !

dodzy

Hoping some of the whizz kids can shed some light on this. I had a few shares in Motorola from back in 2001 when I worked there. Arse fell out of them in the years that followed so I just kept them and periodically checked the value. At some point, I got notification that Motorola had split in some way to Motorola Mobility & Motorola Solutions.

OK, so Motorola Mobility was sold to Google I think. Then I get a cheque for $220. The value of the shares was $320 AFAIR. I'm assuming that the charge was tax. Is this correct ? Should I be liable ?

Any info appreciated.

A Primal Nut

The first €1,270 of an individual's annual gains is exempt. So you shouldn't have paid any tax on it, unless you already earned at least €1,270 in Capital Gains elsewhere. In that case you would pay 30%, so $96 out of $320. That would leave you with $224.

http://www.revenue.ie/en/tax/cgt/cgt-faqs.html

Maybe you have to claim it back if its within your first €1,270. Hopefully someone else can answer.

delux

If the company you work for gives you something like shares/options it's viewed as benefit in kind(BIK) so is liable for income tax. But you are supposed to pay this in the year you got them. (from my experience Revenue won't penalise you for late payment though)
Capital gains only applies on the price difference between the price you sold them at and the price your company gave them to you at. If the price dropped since you got them then I'd say no CGT applies.

A Primal Nut

delux wrote: »

Capital gains only applies on the price difference between the price you sold them at and the price your company gave them to you at.

But if he got the shares for nothing then the price he sold them at is all profit?

evostik

Sounds like US withholding tax. Your broker needs to have a current W8-Ben Form which declares your a non US resident, otherwise they must deduct witholding tax. Not 100% sure but you can probably can make a retrospective claim to the US Revenue.

delux

But if he got the shares for nothing then the price he sold them at is all profit?

yea it's a funny one. My understanding of it is that the capital gain is basically any gain while you hold the asset. So if my company gives me a $30 share, then i sell it for $35 the capital gain is $5. But if i sell it for $30 or less there is no capital gain. However the $30 is a benefit the company gave me so is liable for income tax.

dodzy

A Primal Nut wrote: »

But if he got the shares for nothing then the price he sold them at is all profit?

Nah, it was an Employee Share Purchase Scheme. Basically, we had the option to set aside a few quid on a monthly basis direct from salary ( I think I opted for 150€ p/m ). We then purchased the shares at whatever was the lowest price within a 12mth window (Day 1 or day 365). A bit of a no-brainer really, for those who checked out on the years anniversary. A lot of us didn't and here we are :-(

Anyway, the purchase price was €27.50 IIRC. And they were as low as $6US at one point. So, I didnt get them for nothing. And in relation to €1270 mentioned by Primal Nut, no is the answer :-)

The US agent was Solomen Smith Barney at the time.