Taxation on ESPP stocks

jain.arpit6 · 15-07-2020 12:48AM #1

Hi,

I am planning to register for Unapproved share scheme ESPP (15% discount). The same plan explained on revenue website. As mentioned on revenue site, I'll be paying Income tax from my payroll after 6 month period ends. I have couple of questions around selling those stocks:

1. Is it possible to sell these stocks immediately when they are granted to me ?
2. Let's say I bought them for 40 euros (discounted price) and market value at the grant date is 60 euros. I will be paying IT for 20 euro profit (60 - 40) from my payroll. If I can sell them on grant day itself (60 euro market price), do I need to pay any other tax like CGT again?

Thanks

y0ssar1an22 · 16-07-2020 08:01PM

i'll look at this tomorrow. have the utd march to watch now :pac:

y0ssar1an22 · 17-07-2020 08:13AM

these answers will depend on the exact nature of the scheme. 1st thing to do is ask the payroll function if they will complete the RSS1 form:

https://www.revenue.ie/en/employing-people/benefit-in-kind-for-employers/other-benefits/company-shares.aspx

and an RTSO1 form

https://www.revenue.ie/en/additional-incomes/documents/form-rtso1.pdf

this bring you within the scope of self assessment, and you need to register for income tax.

1. if they are unrestricted, you can sell them when you like. again, consult with payroll about this.

2. RTSO1 will deal with the income tax but you be be liable ot IT on 20 (MV vs discounted price). when you sell the shares: proceeds 60, less cost 40 = 20 liable to CGT

revenue do not allow you to use the income tax paid to increase the base cost, and thereby reduce potential CGT.

there are potential residency issues as well which i am ignoring.

Taxation on ESPP stocks

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