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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4810
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I left my ex company an American company in 2013. I had

Customer Question

Hi, i left my ex company an American company in 2013.
I had vested shares which have been taxed as follows:
shares options amount paid £25590 tax paid £10,357 and a deduction CQ re shares £12513
RS vest amount paid £26,598 tax paid £10,810 and a deduction CQ re shares £14,077
shares options amount paid £163,500 tax paid £79,927 and a deduction CQ re shares £179,922
This seems a large amount to pay, am I due a rebate? if so how would i go about this?
I am a UK citizen and resident
Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
sorry that last deduction should read £79,922 not £179,222
Customer: replied 1 year ago.
this is the note my company has just sent me:Thanks for your note and for providing the schedule. This proration and taxation is actually the case. The 10,484 on the attached were the prorated shares before tax withholding. Using the last item on the list as an example 1,157 shares were granted and you had them for 13 months of the 36 months when you separated. So 1,157 granted divide by 36 months to vest times 13 months you had them, gets the 419 prorated shares. Then when vesting occurred taxes were taken out. I did a look at your account and noticed you are in the UK which has a 54.59% tax withholding rate. The net shares are what you are seeing in your account unless you have taken anything out, but you need to contact Fidelity to certify/activate your account. I show there is W8 or some other certification needed. Sorry that your call to Fidelity was not understood and answered correctly, but you have had the net shares after taxes in your account for a few years now. If you call them back and explain these are net shares after taxes in your brokerage account and indicate you need to talk to someone about your brokerage account and reactivating or certifying it, you should then have access to your shares; and furthermore if you do that and then log into history of your options and RSU accounts, you’ll see the vesting and tax transactions in 2013 and 2014. So first thing please is call them and certify and reactivate your brokerage account and then look at your RSU transactions to see the prorating and vesting
Expert:  bigduckontax replied 1 year ago.
Hello, I am Keith one of the experts on Just Answer and pleased to be able to help you with your question. Being an US company, I assume that this is not an HMRC approved share scheme; please confirm.
Customer: replied 1 year ago.
It is a company called NCR Corporation and Fidelity are the brokers holding it. I am not sure how I check if HMRC approved or not?
Expert:  bigduckontax replied 1 year ago.
I very much doubt if it is running an HMRC approved employees share scheme. In which case all options granted form part of your income and are subject to UK Income Tax. Furthermore on disposal the gain is subject to Capital Gains Tax (CGT) although the normal procedure is for shares to be sold on vesting day so no capital gain is involved. Your question refers to 'CG re shares.' I assume that this is the capital gain you made on disposal of the shares presumably at a date later than the vesting day. Please confirm.
Customer: replied 1 year ago.
it is cq not cg
Expert:  bigduckontax replied 1 year ago.
Sorry to be obtuse but i don't get cq?
Customer: replied 1 year ago.
It refers on my deductions on my payslip as
Ded CQ Re shares
Expert:  bigduckontax replied 1 year ago.
Got it, thinking cap now on. You will be liable for UK Income Tax (IT) in the tax year the shares vested. If you hold the shares and sell them then you will be liable to UK Capital Gains Tax (CGT) on any gain made. Fortunately, under the Double Taxation Treaty between the UK and the USA, and indeed some individual States within the Union as well, an item of income can only be taxed in one jurisdiction. This is achieved by means of tax credits, the tax paid in one country being allowed as a tax credit against the liability in the other; in your case 10357, 10810 and 79927. The Treaty does not, however, protect you from differences in rates of taxation. Any US tax nor absorbed in this way is, I regret, money sunk and lost unless you can get the IRS to release it. You have a major problem with the last option. If your income goes over 100K in any tax year then you loose your Personal Allowance at the rate of two pounds for every two quid over the 100K. Furthermore tax increases to 45% if your income goes over 150K. When you sell you will be liable to CGT on the gain from the vesting price. CGT is at 18% or 28% or a combination of the two rates depending on your income including the gain in the tax year of sale. You do have an Annual Exempt Amount (AEA), non cumulative, of 11.1K to offset such gains. If by any chance the scheme is HMRC approved, and you will have to ask NRC about this, then, providing you hold the shares for five years, no tax or NI is due on the grant of your options and no CGT on sale providing you do not breach the AEA. Now you see why I needed to know the share scheme's status.