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bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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Hi Sam, I asked a question already, but I think I may have

Customer Question

Hi Sam,

I asked a question already, but I think I may have hit the wrong button.

I am British, an ex-pat based in Singapore working for an American Company. They calculate my tax as if I am still based in the UK as UK resident - so this question is as if I am a UK resident.

I was granted share options in this US company circa 3-4 years ago, had to wait I think 2 years to be able to exercise them. Let's say the value was $10 per share and the shares are now worth $15. If I sold 1000 shares, what tax would I pay? UK income tax (40%+) or capital gains (15%?).

Thanks!
Submitted: 2 years ago.
Category: Tax
Expert:  bigduckontax replied 2 years ago.
Hello, I'm Keith and happy to help you with your question.

I assume that you have not breached the 90 day rule in visits to the UK in each tax year? Please confirm.
Customer: replied 2 years ago.

I have not.


 


Please note that the options I am looking to sell were granted in 2010 and 2011.


 


I was resident in the UK 2008-2011 November, then in Brasil Nov 11 to Dec 13, now Singapore.


 


Since leaving the UK, I have spent circa 20 days p/a in the UK, the majority of the rest in my assignment country.

Expert:  bigduckontax replied 2 years ago.
You should have filled in a form P85 when you left the UK to tell your tax office that you have gone. If you haven't I urge you to do it as soon as possible. Your tax office will then know you are not resident in the UK for tax purposes and adjust your tax code for starters. All is not lost, however, you can get the tax back for the years you were not resident. In some cases the double taxation treaties between the UK and many other countries will give tax credits against one another's taxation liabilities. It doesn't for Brazil however, that only covers maritime and air cargo trading.

As far as options are concerned they usually become liable to say Capital Gains Tax on sale, but as you are not resident in the UK there is no need to be concerned.

You are in for a plethora of forms submission and letter writing!

I do hope I have thrown some light on your position, Please come back to me if you need to, I shall be pleased to help.
Customer: replied 2 years ago.

Thanks Keith,


 


I have already filled-in the P85 on departure.


 


However my company treats me as if I never left the UK (they pay all my tax in various countries and I pay them as if I never left) so I have a virtual tax position in the UK - so can you please tell me if the profit from the sale is circa $50,000 (between option price and current price) what actual tax do I pay - is it capital gains @15%? This is the tax I would expect to pay in the UK if I had stayed?

Expert:  bigduckontax replied 2 years ago.
Had you stayed in the UK it would probably have been a capital gain, but the rules are very complex and differ from scheme to scheme. Sometimes Income tax and NI come into it too.

Capital Gains Tax would have been levied at 18% or 28% depending upon the income position of the tax payer in the year of sale.
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3384
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 2 years ago.
Thank you for your support.

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