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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 10840
Experience:  FCCA FCMA CGMA ACIS
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I need to pay capital gains tax on Restricted Stock Units

Customer Question

I need to pay capital gains tax on Restricted Stock Units (RSU) that I received from my US-based company. However, I am not sure what the correct base cost is to calculate the tax liability.When the stock vested, a proportion of the RSUs were sold by the company and the proceeds from these submitted to HMRC to cover taxes.Do I take the difference between the value of the shares at the time of vesting and the value when they were sold, apply the £12,300 allowance, and pay capital gains tax on the remainder?Or, does my base cost for the RSUs start at zero, rather than the value they were at time of vesting?
JA: What are the assets or property for this capital gain?
Customer: Restricted Stock Units.
JA: Is there anything else the Accountant should know before I connect you? Rest assured that they'll be able to help you.
Customer: No.
Submitted: 12 days ago.
Category: Tax
Expert:  bigduckontax replied 12 days ago.

You are correct in your assumptions. Tax will be at 10% or 20% or a combination of the two trates depending on your income including the gain in the tax year of disposal.

Customer: replied 12 days ago.
Which assumption is correct?1) Do I take the difference between the value of the RSUs at the time of vesting and the value when they were sold, apply the £12,300 allowance, and pay capital gains tax on the remainder?or:2) Does my base cost for the RSUs start at zero, rather than the value they were at time of vesting?
Expert:  bigduckontax replied 12 days ago.

1)

Customer: replied 12 days ago.
Ok. So if, for example, the RSUs awarded by my company were valued at £10,000 at time of vesting and were then sold by me for £30,000 at a later date, would the total gain be £20,000, rather than the full proceeds of £30,000? I am trying to fathom if HMRC views the total gain here as £30,000, because the shares were awarded to me by the company rather than being purchased by me at the market rate, or if the gain would still be £20,000.
Expert:  bigduckontax replied 12 days ago.

Yes, but that is taken into account in the vesting.

Customer: replied 12 days ago.
to which one?
Expert:  bigduckontax replied 12 days ago.

I have already told you, 1).