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confused by tax share system

  • 11-05-2016 9:57am
    #1
    tringlarido
    Registered Users, Registered Users 2 Posts: 47 ✭


    Hi all,

    I had US shares from US company share scheme with discount over 2006 to 2012 and sold them over these years.
    My domicile was in ireland.
    I understand there was an additional taxes that should have been paid on gains.. so I'm looking to understand how it works.

    Is it CGT or income tax ?
    What is the rate, is it 33% or 40% ?
    Is there a penalty as I didn't declare back at that time ?
    Is there a credit tax ?

    I'm confused with the 2 statements I found from previous posts

    You only pay income tax, and it's been like that for a good number of years. It doesn't attract CGT anymore. It's now charged at the highest rate of income tax and you have 30 days to pay it from realising the gain. Often your company will notify Revenue if you exercise any options. You use the RTS01 form and send it in along with a cheque to the collector general. It's also a good idea to do a return every year as well.

    CGT rate is 33% and is charged on the gain that arose from the share sale. An allowance is given for the original cost of the shares and depending on year of purchase can be indexed to factor in inflation. Also, the first €1,270 of taxable gains in a tax year are exempt from CGT.

    thanks


Comments

  • #2
    tringlarido
    Registered Users, Registered Users 2 Posts: 47 ✭tringlarido


    any idea ? :-)


  • #3
    CIARAN_BOYLE
    Registered Users, Registered Users 2 Posts: 14,599 ✭✭✭✭CIARAN_BOYLE


    You've got a few issues here overlapping. I will try and give you an answer later.


  • #4
    CIARAN_BOYLE
    Registered Users, Registered Users 2 Posts: 14,599 ✭✭✭✭CIARAN_BOYLE


    When you are selling shares you pay CGT at 33% on the gain. The first 1270 gain in a year is CGT exempt. Any losses in prior years can be used to offset your gains.

    If you get shares at a discount from your employer you pay income tax on the discount.

    IE you get 1k shares for €1 a share. Market price is €10 a share. You got a discount of 9k. You have to pay income tax on the 9k.

    For CGT purposes you are assumed to have acquired the shares for €10 a share.

    If you then sell the shares for €12 a share gain of €2k.

    Subtract the 1270 annual exemption and you made a taxable gain of €730 which is subject to cgt at 33%.

    Interest rates with Revenue are roughly 9% per annum so that could be significant.


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