Shares

felix001

Ive been awarded a number of shares from my company.
Half are RSU`s (restricted stock units) and the others are stock options.

Can anyone let me know how the TAX is calculated on these.
I read somewhere that you can transfer the money into an ISA to aviod paying tax. Does anyone know if this is true.

Thanks,

sweetme

You can transfer to an ISA as long as you have enough ISA subscriptions left.

felix001

So i could do that for both rsu and stock options and not have to pay any income tax ?

jimmo

Your employer really should be the best source of advice on this.

These sorts of issues tend to move on at quite a pace so my knowledge is probably rather dated but for what it is worth, the first big question is whether the scheme your employer is “approved”?

The tax treatment of approved schemes is very different to that for unapproved schemes.

If the scheme is unapproved you could well face an Income Tax liability simply for being given what your employer has given you. If the scheme is approved that is unlikely.

I have no idea what an RSU is but a stock option is neither stocks nor shares. It is an option to buy in the future maybe for a fixed price.

I have no idea whether you can put your RSUs into a stocks and shares ISA and, whilst an option to buy does have a market value, it is not actually stock or shares and I doubt that an option could be placed into an ISA.

If you can actually get the RSUs and the options into an ISA that will protect you against future taxation but cannot retrospectively protect you from any tax liability that arose when the RSUs and options were awarded to you.

John_Pierpoint

Usually you have the right to exercise the option and then bung the resulting shares into you annual ISA allowance.
You also have an annual allowance or nil rate band of 10,600 that is CGT free.
If you have a legal partner, they can be given enough shares to use up their £10,600 annual tax free gain too.
Then there is the last day of the tax year 5th of April so sell some shares before and after those dates and potentially have a tax free gain of £21,200.

If the Human Resources department does not understand the ins and outs of the incentive scheme, the company secretary probably does; it is his job to field queries from shareholders.
As "jimmo" says this depends of the company having persuaded HMRC that their incentive scheme complies with regulations to make it approved and not just a method of trying to give tax & NI free salary to employees.