Selling US company employee options...CGT & transferring...

newbiesaver55

Ok, wondering if you guys can help me out here. So we have some stock options in a US company where hubby works; he is a higher rate taxpayer, I have a very part-time job earning about £4k. Some questions then...

a) Does he have to pay CGT on the profit *as well as* any IT due?

b) Is there anything to stop him transferring the shares to me and me paying a lot less IT on them...?

c) Can we transfer some shares once we convert them into shares into our children's names as we think long term they may do quite well... and keep them in trust for them for say, 15 years?

Daniel54

Normally,when you exercise options you can elect either to exercise and hold ,in which case you buy the shares - or exercise and sell ,in which case the shares are bought and then immediately sold and you receive the proceeds in cash

In both cases there is no CGT but the gain ( difference in option and market price ) is taxable as income.I am assuming these are shares given to your husband as part of his remuneration package.

He cannot transfer the options to you ( but double check the scheme literature to be doubly sure)

If you decide to buy the shares then any gain after that will be subject to CGT.He can transfer some or all of the shares as he wishes once he owns them ( but this will not save any income tax -that is paid at the point of exercise)

Do bear in mind that it is unwise to have too much of your investments in the shares of one single company

newbiesaver55

That's really helpful, thanks Daniel - and I agree about the all eggs in one basket statement!

newbiesaver55

ooh I didn't know that re tax, thank you.