Share options tax implications ireland
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To find out more about our use of cookies you can visit our privacy and cookies statement. By browsing this website, you agree to our use of cookies. In Ireland, employees can avail of certain share options from their company that may be 'tax free' or 'tax efficient'.
Understanding Your Options- Tax Implications of Stock Options
However, it is useful to bear in mind that there are few benefits employees can receive that are completely 'tax free'. Approved Profit Sharing Schemes are subject to certain conditions set out in legislation and administered by the Revenue Commissioners.
The employer must hold the shares for a period of time called the "retention period" and the employee must not dispose of the shares before three years.
If an employee disposes of shares before this time, he or she is liable to pay income tax on whichever is the lower of the following:. Approved Profit Sharing Schemes are subject to a number of conditions that should be checked with the Revenue Commissioners.
More information can be found in Revenue's publication Approved Profit Sharing Schemes IT62 pdf. Revenue approved Savings-related Share Option Schemes allow you to save for and purchase share options in your employer's company tax effectively.
You should check with the Revenue Commissioners and your employer as to what rules apply to your share options and when you are liable to pay tax.
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You can find information in Revenue's publication A Guide to Savings-Related Share Option Schemes pdf and in Revenue's eBrief No. If you have a question relating to this topic you can contact the Citizens Information Phone Service on 07 Monday to Friday, 9am to 8pm or you can visit your local Citizens Information Centre.
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There are two main ways an employee can benefit from shares in the company: Approved Profit Sharing Schemes Stock Options. If an employee disposes of shares before this time, he or she is liable to pay income tax on whichever is the lower of the following: The market value of the shares when they were given to the employee or, The value of the shares at the time of sale Approved Profit Sharing Schemes are subject to a number of conditions that should be checked with the Revenue Commissioners.
Stock options in your employer's company Revenue approved Savings-related Share Option Schemes allow you to save for and purchase share options in your employer's company tax effectively. Related Documents Capital Gains Tax Capital Gains Tax is charged on the capital gain or profit made on the disposal of an asset. Some assets are exempt from Capital Gains Tax.
Find out if you are liable for Capital Gains Tax. Capital Acquisitions Tax If you receive a gift, you may have to pay gift tax on it.
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If you receive an inheritance following a death, it may be liable to inheritance tax. Both these taxes are types of Capital Acquisitions Tax. Taxation of benefits from employment Employees can get certain benefits in addition to their salary or wages.
Some of these benefits are taxed. This document provides information on how such benefits are taxed. Contact Us If you have a question relating to this topic you can contact the Citizens Information Phone Service on 07 Monday to Friday, 9am to 8pm or you can visit your local Citizens Information Centre.