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Where Taxpayers and Advisers Meet

Company shares

Robbie123
Posts:1
Joined:Thu Nov 02, 2017 1:19 pm
Company shares

Postby Robbie123 » Thu Nov 02, 2017 2:59 pm

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!

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