Tax on Shares

Adamshaw1982

Hi, I was awarded shares for the company I work for, which is an American private company. We've just been bought out and I've been made aware of what my shares are worth, and that they will be paid out once the acquisition is closed. I'm being told by some that this could be a capital gains tax, and others that this will likely be processed through payroll and I'll pay 47%. It's a significant amount of money so really hoping the ensure I know the correct status, if anyone can help!?

Sibbers123

It will depend on what type of shares they are and how the shares were awarded. It is possible that you will be subject to income tax and national insurance on the consideration. If this is the case, your payroll department will deal with it.

p00hsticks

I don't see how payroll could possibly deal with CGT as they will have no idea what other gains or losses you have during the year or how much of your CGT allowance is available to you. Income tax, if applicable,  is another matter though

HappyHarry

It is usual for US company shares (employer provided ones) to be liable for income tax and NI rather than CGT. US company shares tend not to have the same tax-favoured status as UK shares, and so do not have the option of CGT liability.

If the shares are liable to NI and income tax, your payroll will be able to deal with them. 

You may may be able to salary sacrifice some of the gains into a pension to avoid immediate taxation.