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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4429
Experience:  FCCA FCMA CGMA ACIS
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I had been in an employee Stock option plan for many years

Customer Question

Hi,
I had been in an employee Stock option plan for many years within my company. The share plan is in the US. I am a UK resident.
Dividends are been automatically reinvested on more shares.
I understand:
- If I sell some shares with a capital gain less than £11,300.
- If any of those shares come from dividend and are been hold in the plan for more than 3 year.
Them I will be exempt of any income/ capital gain taxation.
Is that correct?
Submitted: 3 months ago.
Category: Tax
Expert:  bigduckontax replied 3 months ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

This will not be an HMRC approved option plan.

Taylor Wessing advise:

'On the sale of shares there will be a charge to capital gains tax ("CGT") (for individuals who are resident in the tax year of disposal) on the difference between the price received for the sale of the shares and the aggregate of the market value on the date of exercise of the option.'

Thus, if you sell shares and make a gain under the non cumulative Annual Exempt Amount (AEA), currently 11.3K, then there will be no tax liability on disposal.

Shares credited in lieu of dividends are treated in the same manner for capital gains. You do not pay Income Tax (IT) on under 5K of dividends distributed in a year these days.

I do hope that you have founs my reply of assistance.