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Previous CGT Returns

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  • 02-10-2020 7:35pm
    #1
    Cian59
    Registered Users Posts: 119 ✭✭


    As part of my job, I get shares and this year it looks like my capital gains tax will be over the personal exemption so have looked into filing for it.

    In this research, it seems as if I should have been filing for previous years even when the gain was below my exemption. Few questions:

    (1) Do you think filing a return for 2020 will cause them to look into previous years and the failure to file returns?
    (2) What is the penalty for failing to file a return when the personal exemption has not been exceeded?
    (3) I assume I should make a filing for 2019 now before 31-Oct.


Comments

  • Options
    #2
    okidoki987
    Registered Users Posts: 10,618 ✭✭✭✭okidoki987


    Cian59 wrote: »
    As part of my job, I get shares and this year it looks like my capital gains tax will be over the personal exemption so have looked into filing for it.

    In this research, it seems as if I should have been filing for previous years even when the gain was below my exemption. Few questions:

    (1) Do you think filing a return for 2020 will cause them to look into previous years and the failure to file returns?
    (2) What is the penalty for failing to file a return when the personal exemption has not been exceeded?
    (3) I assume I should make a filing for 2019 now before 31-Oct.

    2019 return date has been extended to 10th December.
    https://www.boards.ie/vbulletin/showthread.php?t=2058114209


  • Options
    #3
    relax carry on
    Registered Users Posts: 4,072 ✭✭✭relax carry on


    Cian59 wrote: »
    As part of my job, I get shares and this year it looks like my capital gains tax will be over the personal exemption so have looked into filing for it.

    In this research, it seems as if I should have been filing for previous years even when the gain was below my exemption. Few questions:

    (1) Do you think filing a return for 2020 will cause them to look into previous years and the failure to file returns?
    (2) What is the penalty for failing to file a return when the personal exemption has not been exceeded?
    (3) I assume I should make a filing for 2019 now before 31-Oct.

    Are you by any chance mixing up income tax and CGT? If you exercise share options from work you are liable to RTSO/Income Tax within 30 days of exercising the share option. Quite a few people sell their shares on the same day as they get them so there is no CGT because essentially you've bought and sold on the same day. RSUs are taxed at source so there is no RTSO/Income tax to pay yourself. And again if you sell all of the shares on the same day you obtain them there is no gain so no GCT.


  • Options
    #4
    okidoki987
    Registered Users Posts: 10,618 ✭✭✭✭okidoki987


    relax carry on wrote: »
    Are you by any chance mixing up income tax and CGT? If you exercise share options from work you are liable to RTSO/Income Tax within 30 days of exercising the share option. Quite a few people sell their shares on the same day as they get them so there is no CGT because essentially you've bought and sold on the same day. RSUs are taxed at source so there is no RTSO/Income tax to pay yourself. And again if you sell all of the shares on the same day you obtain them there is no gain so no GCT.

    You sure about this?
    There must be a profit on the share option price and the sale price otherwise you wouldn't exercise the option?
    There is CGT payable if there is a profit on the difference between the purchase and sale prices.


  • Options
    #5
    relax carry on
    Registered Users Posts: 4,072 ✭✭✭relax carry on


    okidoki987 wrote: »
    You sure about this?
    There must be a profit on the share option price and the sale price otherwise you wouldn't exercise the option?
    There is CGT payable if there is a profit on the difference between the purchase and sale prices.

    https://www.revenue.ie/en/additional-incomes/employment-related-shares/unapproved-share-options.aspx

    You must pay Income Tax (IT) on any gain you make on the exercise, assignment or release of a share option.

    Capital Gains Tax (CGT) may also be due when you dispose of your shares.

    So gain on exercise is subject to income tax (RTSO) and then potentially CGT on the gain from the exercise date to the disposal date of the shares. If you sell on teh same day you exercise there's no CGT so the IT due is the only liability.

    For some examples see section 3.8

    https://www.revenue.ie/en/tax-professionals/tdm/share-schemes/chapter-03.pdf


  • Options
    #6
    okidoki987
    Registered Users Posts: 10,618 ✭✭✭✭okidoki987


    relax carry on wrote: »

    Capital Gains Tax (CGT) may also be due when you dispose of your shares.
    So gain on exercise is subject to income tax (RTSO) and then potentially CGT on the gain from the exercise date to the disposal date of the shares. If you sell on teh same day you exercise there's no CGT so the IT due is the only liability.

    For some examples see section 3.8

    www.revenue.ie › tdm › chapte...PDF
    Share Schemes - Chapter 03 - Unapproved Share Options

    Could you correct the link for the revenue page please as I still can't believe there is NO CGT payable on a purchase and disposal on same day.
    I've had share options in different companies mature that I worked for and never had a mail from any of the promoters of the schemes to say there would be No CGT payable if I sold them on the same day?


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  • Options
    #7
    relax carry on
    Registered Users Posts: 4,072 ✭✭✭relax carry on


    okidoki987 wrote: »
    Could you correct the link for the revenue page please as I still can't believe there is NO CGT payable on a purchase and disposal on same day.
    I've had share options in different companies mature that I worked for and never had a mail from any of the promoters of the schemes to say there would be No CGT payable if I sold them on the same day?

    Link corrected.


  • Options
    #8
    NotHappyAtAll
    Registered Users Posts: 14 ✭NotHappyAtAll


    To clarify, the above examples of not paying CGT when selling the shares on the day they were received applies to shares received in the company as an employee? If someone were to buy and then sell shares in a third company, say Microsoft or Tesla for example, on the same day they would still pay CGT as normal?


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