Claiming Tax back on share sale.

hillbilly5

I recently left employment with one of the Uk's largest companies. During my employment I was issued with free shares. When I left I decided to sell them but some of them were tax and NI liable so I had to pay a fair amount to the taxman once these were sold.

I earn under the LEL and so don't pay any tax and just wondered if at the end of the tax year I could apply for a refund of the tax I paid when I sold the shares?

John_Pierpoint

Was this a share save scheme that vested early with you because you left or were made redundant?
How were the taxes deducted? Via the payroll?

taxing

hillbilly5 wrote: »

I recently left employment with one of the Uk's largest companies. During my employment I was issued with free shares. When I left I decided to sell them but some of them were tax and NI liable so I had to pay a fair amount to the taxman once these were sold.

I earn under the LEL and so don't pay any tax and just wondered if at the end of the tax year I could apply for a refund of the tax I paid when I sold the shares?

Looks like you will need to do a Self Assessment for 2010/11 tax year as you will need to declare the capital disposal of your shares (even though no gain, if you paid income tax on the exercise of your options).

I find it intruiging that you "earn under the LEL" - did you get dividends then to make up your pay - can't believe you worked for 'love'? Dividends are taxable, too, you realise?

Or do you mean now you earn under LEL - but we are still in same tax year which doesn't end til 5/4/11 and earnings are cumulative. At the very least, your share options exercise will (if you paid a fair amount of tax) have used up tax allowances and possibly the basic rate band. You may even lose your personal tax allowance as that starts to go once your taxable income (including the share option gains) reaches £100k for the tax year.

If your share option exercise was done after you left and after your P45 was issued, you may actually have more tax to pay - as the exercise probably only had tax at 20% taken off when, in reality some tax may be due at 40% or even 50% on the gain.

If you worked for a large organisation did they not make available tax information and professional help: they usually do, particularly if giving 'packages' including shares. Look through any paperwork they gave you and ask the appointed accountants - they will know the 'scheme' (or schemes) your were part of and will give proper advice. You may even be entitled to assistance from them re submitting a Tax Return as it is fairly common for employers to make that available as part of the 'remunneration package'.