TaxPersonal TaxDeadline looms for employee share options

Deadline looms for employee share options

Under new rules, employees that have been awarded shares in their company on or after 16 April must specify how they wish to be taxed by 15 September.

Link: Share options standard to alter pay packages

This is due to provisions in this year’s Finance Act which is also likely to see income tax and national insurance contributions apply raising the tax bill to 54% as opposed to the current 10% capital gains tax.

Tax specialists from PricewaterhouseCoopers warn that the rules dealing with share options have been completely rewritten under the new Act, turning employee share acquisitions into a ‘fiscal minefield’.

Alex Henderson from PwC said there was a ’14-day time limit from when you get the shares for choosing how you’re going to be taxed to avoid more tax later’.

He explained: ‘Employees and employers would normally be hit with this income tax/NIC charge when the share rights are changed or the shares sold. But they have 14 days to elect – jointly – to be taxed on the value when the shares are given. Anyone who has acquired such shares since 16 April has until 15 September to make the election.’

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