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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 7768
Experience:  FCCA FCMA CGMA ACIS
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I have a long term incentive plan that has matured, in the

Customer Question

I have a long term incentive plan that has matured, in the statement it shows shares sold before vesting that take account of withholding tax. Question does that mean tax is settled, or do I declare in my tax return, if so where does the withholding tax already taken go?
JA: Which tax year are you filing for?
Customer: 2018-2019
JA: Anything else you want the Accountant to know before I connect you?
Customer: No.
Submitted: 4 months ago.
Category: Tax
Expert:  Adam Hunt replied 4 months ago.

I am one of the experts. Your employer might have deducted tax already via paye. Is that the case?

Customer: replied 4 months ago.
No not through PAYE, but the statement on the LTIP share site shows Withholding tax that has been taken - I don’t know what withholding tax is?
Expert:  Adam Hunt replied 4 months ago.

Sorry i am stuck somewhere so opting out. One of other experts will get back to you now. Good luck.

Expert:  bigduckontax replied 4 months ago.

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

Is this Incentive Plan HMRC approved?

Customer: replied 4 months ago.
it must be - I work for a FTSE 50.
Expert:  bigduckontax replied 4 months ago.

Then there is no Income Tax (IT) due on vesting if it is approved. The fact that tax has been deducted puts that in doubt. You will have to ascertain the true position regarding HMRC approval of the scheme.

Customer: replied 4 months ago.
It’s the “withholding tax” that I don’t understand..
Expert:  bigduckontax replied 4 months ago.

Exactly, it sound suspiciously like an US company.

Customer: replied 4 months ago.
Nope UK company the bit of interest is here
Customer: replied 4 months ago.
The para in the plan rules...
Expert:  bigduckontax replied 4 months ago.

Hmm, you will probably find that you have been over taxed at the conclusion of the tax year.

Customer: replied 4 months ago.
What leads to that thought?
Customer: replied 4 months ago.
Do I need to declare this award on my tax return if the withholding tax has been taken?
Expert:  bigduckontax replied 4 months ago.

In my opinion, no assuming that the scheme was approved.