Sale of shares and capital gains tax

Moose1

Hey Everyone,

My wife has left it up to me to calculate her tax liability on shares she has sold with her company.

She has purchased shares each year with a preferential discount (and paid tax/usc and prsi) on discount.

This year she has decied to withdraw from purchasing shares and has sold ALL shares.

I am trying to work out the tax liability on the sale of the shares.

I am confused on which figure to take as the capital gain. The statement has two columns

Gain/Loss

Adjusted Gain/Loss

Which one do I use to calculate what is owed?

(Gain or adjusted gain - €1270)@ 40% tax

All help appreciated.

Geuze

CGT is 33%.

carveone

Just my opinion as a taxpayer, not as an accountant, it depends what adjusted gain means in this context. I've seen it used to mean the capital gain calculated at 33% as if you were paying the amount at Corp tax rates. So 10k would be 3300 in cgt but if you put it all together as ct at 12.5%, then the adjusted gain is 26400.

In my case, I have shares purchased when my company was at $35 discounted to $27. So I paid the difference as a BIK (on my payslip).

I then sold at $50. My gain for Cgt is 50 - 35 which is 15 per share. It's possible that this is my "adjusted gain" and my "gain" is 50-27 = 23 but I'm not interested in that value as I've paid the difference at 52% already.

Minus the paltry 1270 of course. Make sure you find any prior capital losses you can use to reduce this. Eg. Stupid Eircom shares if you sold them.

Moose1

https://www.boards.ie/discussion/comment/121593882#Comment_121593882

I think if it is a foreign investment its taxted at 40%

Moose1

https://www.boards.ie/discussion/comment/121593994#Comment_121593994

Thanks Carveone. I think the problem is that I also now have to pay the tax etc. on the discount amount so more to work through. Will check the gain/adjusted gain percentage difference to see if this aligns with a Corporate tax reduction value.

Appreciate the assistance.

carveone

https://www.boards.ie/discussion/comment/121600498#Comment_121600498

Only certain foreign funds are taxed at 40%. Like life assurance policies and certain types of foreign investment products like annuity products. It's weird enough that'd you'd know if was weird.

If your wife still works for this company, I'd be on to their finance division to ask. It should be really clear what the share's market price (not the discounted price) was at the time of purchase. In my case, it's in dollars but that must be converted to euro on the trade dates.

So, rather painfully (I've this mad spreadsheet now), you convert the buy price to Euro as it was on the day of purchase. And then you take the sale price in euro on the day it was sold. This can be a massive pain in the hole if you didn't track it as you were going along, especially if you've several years and multiple purchases per year.

It's a pile easier if you've block sold. Otherwise you have track the sell prices inversely - whatever you bought first, you've been deemed to have sold first (except for the most recent 4 weeks but that's a whole other thing).

So you get: I bought 100 shares at 20 euro = 2000 euro. I sold 100 shares at 40 euro = 4000 euro. Capital gain is 2000 euro - 1270 x 33% = 243 tax.

Also don't trust anything I say as financial advise; I could be mad for all you know 😁

https://www.boards.ie/discussion/2058330462/sale-of-shares-and-capital-gains-tax

Has she also filed her RTSO1 forms and paid Relevant Tax on Share Options, for each discounted purchase of shares?

Moose1

Hey Down the road!

Yes after more confusion, I ascertained that she needed to pay tax in share discount.

All is now in hand. Just need to get the form 12 filled out and returned.

Tha is again for all of the help

https://www.boards.ie/discussion/comment/121646872#Comment_121646872

Then it's a case of taking the share market value on each acquisition, converting to euro at that date, subtracting from the value of the share of sale date (again converted to euro) and use your annual exemption from cgt.

If she purchased ESPPs in 2023 its a Form11 she needs to file not a Form12.