Hi,
My question is about tax on shares.
I have 2000 options in my companies unauthorised share scheme. I can not exercise the options for another 3 years, or at the time of the sale of the company, whichever comes first (the latter I suspect).
I understand I need to pay income tax on the difference between option price and exercise price, and I am at the 40% tax bracket.
- If I make a profit,that when added to my yearly salary comes to over £150k, would that put me in the higher rate tax bracket for anything above that?
- When I exercise, I believe I’d need to pay 40% (potentially 45% on some earning if above does affect me), plus NI, on anything above the option price. So if my shares are worth £50 per share at time of sale (£100k in total), and the option price was £10 per share (£20k), i’d need to pay + £40k in tax and NI on the £80k increase?
Does anyone have any reccomendations on how to reduce this tax bill?
- If I can keep hold of the shares after exercise, then sell them later, I think I would be liable for CGT on anything above the exercise price? If my wife is not earning a salary, makes sense to put shares in her name to use both of our allowances?
Thanks for any advice!
- Home
-
Tax News
- Budgets and Autumn Statements
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings & Investments, Pensions & Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations & Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practice and Methods
- Professionals in Practice & Industry
- General
- TaxationWeb
-
Tax Articles
- Budgets and Autumn Statements
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings and Investments, Pensions and Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations & Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practice & Methods
- Professionals in Practice & Industry
- General
- Tax Tips
-
Tax Forum
- Income Tax
- Business Tax
- PAYE and Payroll Taxes, National Insurance, NICs
- Company Taxation
- Savings & Investments, Pensions & Retirement
- Capital Gains Tax, CGT
- Property Taxation
- Inheritance Tax, IHT, Trusts & Estates, Capital Taxes
- Tax Investigations and Enquiries
- VAT & Excise Duties
- Stamp Duty, Stamp Duty Land Tax, SDLT
- International Tax
- HMRC Administration, Practices & Methods
- Professionals in Practice & Industry
- General
- Tax Jobs
- Get in Touch