Share options are generally granted by Public Companies to employees.

There are a variety of share option schemes and the tax treatment depends on the terms of same and if the scheme has been approved by the Revenue Commissioners. If the share price goes up then the employee could make a significant gain when the option is exercised. For onwards there has been a major change in how the benefits of such schemes are taxed.

The benefits of Share Award Schemes, Unapproved share Option schemes and Revenue Approved plans are now liable for PRSI and the Universal Social Charge USC. For tax purposes this gain is divided into two parts.

The first part applies when the option was exercised. This is calculated as follows:. This paper profit is immediately liable for income tax and must be paid over to the Revenue within 30 days of exercising the option.

PayLessTax How Share Options are Taxed

From onwards PRSI and the USC charges also apply. The second part of the tax charge arises when the shares are sold. The tax rules for dealing with share options are complex and depend on the type and terms of the scheme involved.

PayLessTax How Share Options are Taxed

There are many different types of share option schemes. Broadly speaking, the different schemes are divided into Unapproved Share Option Schemes means not approved by the Revenue Commissioners and Approved Share Option Schemes means the scheme has Revenue Approval.

For unapproved schemes there are strict deadlines for when the tax is due and for the declaration of details regarding share options to the Revenue. If these dates are missed, interest and penalties can arise. Independent professional advice should be obtained when dealing with share options to ensure all matters are properly dealt with.

We can provide this service at an additional charge. Where an employee benefits from an Unapproved Share Option Scheme they are obliged to make tax returns under our Self Assessment Tax System.

Employee share option schemes

Apart from Unapproved Share Option Schemes the other type of schemes generally fall within the following categories;. Copyright - PayLessTax.

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