paying taxes on RSUs upon selling

murfilein

i am planning to sell some vested RSUs.

so i believe i have to pay taxes on the difference between the price at purchase and the price at disposal? (ie. i bought at 100 euros and sell at 110 euros, the tax applies to 10 euros?)

how do i do that? who do i call? can i do that online? i have no idea and i hate that my employee just started giving us shares and has resources on anything tax related.

ELM327

You already paid tax on the RSU on deemed value when they vested. That would have a value given on your salary /wage slip, along with a value per share used for tax purposes in your brokerage account (eg etrade).

If you sell at higher than the deemed value you made a profit and you need to pay CG tax on that. First 1k (i think) is written off.

In your example, you were given the RSUs at 100euro , and the tax was already applied at that, so if you sell at 110, you need to pay CGT on the 10 euro.

Unless you're talking about shares you bought as part of an ESPP/ESOT , in which case you need to pay BIK on fair market value less the acquisition price, and then CGT on sale price minus fair market value at acquisition

murfilein

https://www.boards.ie/discussion/comment/120244774#Comment_120244774

yeah i'm talking about RSUs in this post. ESPP is another topic lol

but where or how do i pay the tax on the RSUs? is there a number i can call and talk through that or a website to do that?

i am with etrade - i would assume when i sell the RSUs they tell me what the purchase price was and what the selling price was so i can figure out what amount exactly i have to declare tax on?

ELM327

Yes the tax is listed in etrade. It will be something listed in the part where they display the witholding tax - this display would change depending on your company's settings.

I think it's a form 11 you have to fill out with revenue but I do stand to be corrected on that one.

relax carry on

Summary details in the first link and more information in the second link. You are responsible for the calculations and declarations for any CGT element assuming you didn't dispose of the shares in the same day they vested. If these are RSUs then the income tax side is already taken care of through payroll. Your employer should have explained the taxation elements of the scheme before you signed up. They should also have some documentation explaining the taxation side.

https://www.revenue.ie/en/additional-incomes/employment-related-shares/taxation-of-employment-related-shares/restricted-stock-units.aspx#:~:text=RSUs%20are%20fully%20taxable%20if,Irish%20tax%20on%20the%20benefit.

https://www.revenue.ie/en/tax-professionals/tdm/share-schemes/chapter-02.pdf

dennyk

If you make a capital gain (or loss) when selling your RSUs (based on their sale price compared to the value of the shares when they were actually issued to you on the vesting date), you'll usually report that on a Form CG1, assuming that you aren't registered for self-assessment and don't otherwise have to file a Form 11. See this Revenue page for details. If you are already registered for self-assessment (e.g. because you have significant non-PAYE income), then you'd report those capital gains on your Form 11 instead.

Note that you must pay any CGT liability in the year it was actually incurred, not in the year you file the relevant CGT return. If you sold RSUs today, for example, you'd have to report that sale on your Form CG1 by October 2024, but you'd have to pay the CGT you owe on those sales before December 15th 2023. Bit of a silly system, all in all, but the taxman wants his money now, not later, so that's just how it is.

roashter

I understand that there is a threshold of 1270 per year, and you only have to pay capital gains tax on any Prof t over this amount.

So if you only make a profit of say 500, do you still have to declare that even though you wouldn't have to pay capital gains tax?

relax carry on

https://www.boards.ie/discussion/comment/120552580#Comment_120552580

Yes.

murfilein

https://www.boards.ie/discussion/comment/120312946#Comment_120312946

so is it the value on issue/grant date of the RSUs or the vesting date? they vest after like a year after being granted, so i'm not sure what value to go with.

dumb_parade

I use the actual price on the vesting date, as this is the value of the shares I am receiving. You can then calculate the profit/loss when you sell, taking into account exchange rates and any fees you are charged.

downtheroad

https://www.boards.ie/discussion/comment/120553100#Comment_120553100

Market value on grant date is your base cost. If you sell them at a higher price than the base cost you have made a gain. If your gain exceeds €1270 in a year then you will pay 33% CGT on the gain greater than €1270. You must file a Form CG1.

murfilein

https://www.boards.ie/discussion/comment/120555917#Comment_120555917

dang. thank you!

looks like i have to sell a couple more stocks purely to be able to afford to pay the tax. what the hell man.

downtheroad

https://www.boards.ie/discussion/comment/120579917#Comment_120579917

Surely you should be able to cover the CGT from the proceeds of the sale of the shares? Its 33% of the gain, and the gain can't exceed the sale price, so the sales proceeds should give you enough cash to pay your tax liability.

If you sell more shares you'll have more of a tax liability.

cython

https://www.boards.ie/discussion/comment/120555917#Comment_120555917

Have you a reference for that about grant date being the base/acquisition cost? My understanding and everything I've seen has suggested the value at vesting is to be considered as the "purchase" cost, and gains are anything in excess of this, with the grant date being moot.

downtheroad

https://www.boards.ie/discussion/comment/120580304#Comment_120580304

Sorry I meant date of purchase/acquisition. Have never seen the grant date have any impact for RSUs. The only use of the grant date is for calculating the discount rate for ESPPs.

cython

https://www.boards.ie/discussion/comment/120580521#Comment_120580521

That was my understanding too, so thanks for clarifying as you had me wondering!

I'm pretty sure the grant date value for RSUs is only used in a notional sense, where the company may use it to calculate/assert the employee's total compensation package in a year, even though the employee won't actually receive the benefit of that for some time to come (vest date or dates), and the value may be very different then.

murfilein

https://www.boards.ie/discussion/comment/120580154#Comment_120580154

yes, what i meant is i sold the units because i had to get cash for a new boiler, and i spend all of that purely for that. so paying the according taxes would be extra for me unless i sell more stock to make it a zero sum game.

Azatadine

Bumping.....I sold a few vested RSU's last week and made ca. 500 euro on them. As such I'm below the 1270 euro threshold for CGT but I have no idea how the heck to deal with the Revenue.ie site to declare that I sold them - I keep hearing that I have to let Revenue know but how the heck do I do that...

Despite asking lots of people I get links to the Revenue site but that doesn't actually provide any details of exactly what to do in terms of forms or anything. The forms I've seen on there are absolute monsters and I wouldn't even know how to start on them.

I have posted an enquiry to them with details of the shares and transactions and maybe they will come back with some instructions but it's brutal trying to find out EXACTLY what to do.

relax carry on

The tax year 2023 is still active. You can't file a CGT return for 2023 till 2023 ends. Assuming you are PAYE only, you file a CG1 tax return by downloading a 2023 CG1, completing it and sending it to Revenue. You can send t as a attachment via myenquiries or send it snail mail to them. You have until the 31st of October 2024 to file the return

https://www.revenue.ie/en/gains-gifts-and-inheritance/transfering-an-asset/when-and-how-do-you-pay-and-file-cgt.aspx

Azatadine

Thanks, I presume I just fill out the relevant section? What the heck is my "Tax Reference Number"?

downtheroad

https://www.boards.ie/discussion/comment/121492900#Comment_121492900

Your pps number

Azatadine

https://www.boards.ie/discussion/comment/121492904#Comment_121492904

Oh! Right, thanks.