Income Tax Due on Overseas Share Scheme

[IanAsking]

Hi,

Can anyone offer me some advice on the following question on whether income tax is due on share sale proceeds? Apologies if these are dumb questions.

I work in the UK for a US company. I was granted the opportunity to invest in some shares in my employer a few years back. I invested a starting sum (around 5k). Last April 2014 the shares were all cashed in (non-optionally) and I received back around £15k. 10k profit, very nice. But very confusing from a tax perspective. I did not receive the funds back through my payroll (I just got a cheque in the post) so the amount was not taxed.

Now I'm completing my tax return and I'm confused over a few points:-
1 - I assume I do need to pay income tax on this, right? Do I pay on the difference (10k) or the total received (15k)?
2 - Being a US company, I did also pay tax on the sale in the US which was taken before I received the funds. Is there any way I can claim that back ever?
3 - Do I also need to be GCT on this as well as income tax?? I didn't so but now I'm starting to wonder if I do.

Any suggestions or advice very gratefully received.

Thanks
Ian

[GlobalTaxAdviser]

Hi Ian

On your questions

If the Share option scheme is approved by HMRC then no income tax or NIC is payable. Sometimes a US parent may get a scheme approved for its UK employees under its UK subsidiary though it may not be the case here.

If its not approved then income tax and NIC is payable on the difference between option price and exercise price

Capital Gains Tax is payable but the gain is below the 11K Annual exemption so that shouldn't be a worry

You can claim the US tax back by filing a US tax return. You will need the withholding certificate I think its the 1042-S or 1099-S

Kind Regards

Sash