Company Shares Allocation and Share Save Scheme

pjmartin1971

Hello everyone,
I've recently been offered a role in a US based company whereby I receive an annual salary plus a share allocation at the commencement of employment. After 1 year of service, I receive 25% of these shares and a further 12.5% every 6 months up to my 4th year of employment when all the shares would end up in my possession.

I've also further options to further invest in shares via their company lead share save initiative (15% discounted rate) and a salary based bonus..

This is the first time I've been eligible for such share options as part of my employment but have to say that it's somewhat a bit of a minefield for me and I'm not quite sure how this may impact me in relation to taxes (I assume but income tax and capital gains tax would apply?). Is anyone able to assist me and describe to me in layman's terms please?

Thank you.

Dead_keen

First bit - Likely answer: employer withholds PAYE/NIC on market value of the shares vesting (i.e. when you receive the shares).
Second bit - Likely answer: employer withholds PAYE/NIC on the "cheapness" when you buy your shares (cheapness = market value less price you paid).
Simple answer - CGT would apply on any gain above the market value after you get the shares.

Small print: Share plans can be structured in a lot of different ways.  This assumes that there is a ready market for the shares (e.g. they are listed) and that you have an employer with a tax presence in the UK.  CGT is more complicated than that because of the way the matching rules work.  The odd US company may have the share save set up as a tax advantages plan but most won't.