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bigduckontax
bigduckontax, Accountant
Category: Tax
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Experience:  FCCA FCMA CGMA ACIS
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I am doing work for a start-up. Two questions: (1) Do I need

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Hi, I am doing work for a start-up. Two questions: (1) Do I need to declare the unpaid work in order to avoid being over-taxed in the future? (2) I have invested in the shares of this startup + I have been granted some shares, do I need to declare this in order to avoid being over-taxed in the future?
JA: Have you talked to a tax professional about this?
Customer: No
JA: Anything else you want the Accountant to know before I connect you?
Customer: Don't think so

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

 

1) No,

 

2) No.

Customer: replied 6 days ago.
Thanks, so, if at a future date my shares are worth something and I sell them, what am I going to be taxed on? The share value today is zero, but I am putting in lots of hours for no monetary compensation.

You will be liable to Capital Gains \tax (CGT) on the eventual sale value. You have an Annual Exempt Amount (AEA) of 12K to offset any gain. You will be taxed at 10% or 20% or a combination of the two rates depending on your income including the gain in the tax year of sale. If you are going out of the business altogether then Entrepreneurs' Relief (ER) which is at a flat rate 10%.

Customer: replied 6 days ago.
OK thanks, so just to make sure I am not missing any tricks here, that fact that I am working nearly full time now without any compensation doesn't get taken into account in any way in the future, for example offsetting future earnings?

No, it doesn't.

Customer: replied 6 days ago.
Thank you.

Delighted to have been of assistance.

 

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