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TonyTax
TonyTax, Tax Consultant
Category: Tax
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Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Some of my stock options vested on 1st July. I am receiving

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Hello. Some of my stock options vested on 1st July. I am receiving a net amount of shares and the income tax due to HMRC will be paid directly via the payroll of my company on 25th July. I also sold some other shares of a listed company this year and recorded a loss. How can i use the loss suffered of the share sales to help offsetting the income tax i am paying on the vested stock options? Thanks in avance and best regards.
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

I'm assuming that you have stock options in a US company in which case it will almost certainly be an unapproved share option scheme as far as HMRC is concerned. That;s why your profit will be charged to income tax and national insurance contributions as opposed to Capital Gains Tax. You will pay tax on the difference between the value of the shares when they vest and the price you pay to exercise the option. The value of the shares when they vest will become your cost for CGT purposes so if you sell them to pay the tax, there won't be a capital gain.

Assuming the shares in the listed company were bought through a broker and not via a tax advantaged scheme such as the Enterprise Investment Scheme or the Venture Capital Trust Scheme you cannot set the capital loss against your income with a view to reducing the income tax charge on the options I'm afraid.

I hope this clarifies your position but let em know if you have any further questions.
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