Questions and Answers
I paid tax on Share Options in payroll, do I need to pay tax again?
I have received share options every year for 3 years from my employer. The income tax was deducted on my payroll. I am planning on selling them, do I need to pay Capital Gains Tax?
When you decide to sell shares you will pay Capital Gains Tax on the difference between the money you receive for the shares when you sell them and the market value of the shares when you triggered the option to buy them.
Example:
You were granted an option to buy 100 with a market value of €150.
If you decided to sell the shares a year later when the market value was €200 per share you would have made a gain of €50 per share i.e. €200 sales price - €150 market value when you triggered the option.
If you sold all 100 shares then your total gain would be €5,000.
The first €1,270 of gains made by any individual in a tax year are exempt from CGT and so the taxable capital gain is €3,730 i.e. €5,000 - €1,270.
The current Capital Gains Tax Rate is 33% so your tax bill would be €1,230.90
Read more about paying tax on shares here
Date published 22 Mar 2022 | Last updated 22 Mar 2022
This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.
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