Self assessment for RSU and stock options
Discussion
Hoping one of you finance brains can help!
My employer offers RSU's and stock options as part of my remuneration. The stock matures equally over 4 years, when they mature they sell half the stock to cover tax (I pay 40% tax, so they then deposit the 10% left over to my salary), so as far as I can tell, I've paid tax on the stock.
I also normally do a SA for a small side business, but the turnover is less than £1k now, so I don't need to do a SA on this bases any more (from my understanding), but still need to tell them.
My question is, do I need to do a SA for the selling of stock, as it's already been taxed?
To add, thinking this through, if they sell stock to cover the tax at the time of it maturing, lets say $100/stock, but it goes to $200/stock and I sell, surely I need to pay tax on the additional €100?
My employer offers RSU's and stock options as part of my remuneration. The stock matures equally over 4 years, when they mature they sell half the stock to cover tax (I pay 40% tax, so they then deposit the 10% left over to my salary), so as far as I can tell, I've paid tax on the stock.
I also normally do a SA for a small side business, but the turnover is less than £1k now, so I don't need to do a SA on this bases any more (from my understanding), but still need to tell them.
My question is, do I need to do a SA for the selling of stock, as it's already been taxed?
To add, thinking this through, if they sell stock to cover the tax at the time of it maturing, lets say $100/stock, but it goes to $200/stock and I sell, surely I need to pay tax on the additional €100?
illmonkey said:
Eric Mc said:
Has it been taxed correctly?
And how is that?!They took half my shares, I assume so...
That does not mean that the correct tax on the transaction has actually been calculated and paid over. Often, the individual needs to complete a Self Assessment tax return so that the true liability arising on the income can be assessed. It doesn't necessarily mean that there is more tax to pay. There might even be a refund due to you.
The problem is that you need to do a full and proper tax calculation on your overall total income for the year so that you can work out if the correct taxation has been applied to that specific transaction.
You can do this WITHOUT completing a self assessment tax return but if you do and discover that you have over or under paid the tax, then you would need to submit a Self Assessment tax return to correct the situation.
Eric Mc said:
illmonkey said:
Eric Mc said:
Has it been taxed correctly?
And how is that?!They took half my shares, I assume so...
That does not mean that the correct tax on the transaction has actually been calculated and paid over. Often, the individual needs to complete a Self Assessment tax return so that the true liability arising on the income can be assessed. It doesn't necessarily mean that there is more tax to pay. There might even be a refund due to you.
The problem is that you need to do a full and proper tax calculation on your overall total income for the year so that you can work out if the correct taxation has been applied to that specific transaction.
You can do this WITHOUT completing a self assessment tax return but if you do and discover that you have over or under paid the tax, then you would need to submit a Self Assessment tax return to correct the situation.
Seems like I need to do one and answer some questions then.
IF I do one, do I then need to declare the under £1k sole trader 'income'? It operates a loss. Or just say no to that bit?
I’m paid the same way (made a thread a few years back) - all RSU stuff is taxed and appears in my payslips. If you sell near to vest I wasn’t under the impression you had to do anything else. Perhaps the only outlier will be if you keep them and make a gain beyond that of the day of vest - CGT then?
Does your payslip show vests like mine?
Does your payslip show vests like mine?
okgo said:
I’m paid the same way (made a thread a few years back) - all RSU stuff is taxed and appears in my payslips. If you sell near to vest I wasn’t under the impression you had to do anything else. Perhaps the only outlier will be if you keep them and make a gain beyond that of the day of vest - CGT then?
Does your payslip show vests like mine?
Yes, it shows RSU and ‘RSU with holding’ in earnings then RSU in deductions. Both RSU’s are the same value. The ‘RSU with holding’ is ~45%, then my pay is slightly higher that month for the additional 5% back, to get me to 40%. Does your payslip show vests like mine?
I’ve just looked when I sold them and it turns out it was in 23/24, so no need to worry just yet
I've been through this too.
They rarely got it right, sometimes way out so you need to do your own calculation.
If you are not disposing of it all when you get it, then you also need to keep a track of vested stock in a Section 104 holding, maintaining the average. You then measure proceeds / losses against that holding for CGT purposes. You need to track this is GB pounds using the HMRC exchange rates.
If you liquidate more than four times the CGT allowance in a year, then you need to declare it on self assessment, regardless of wether you owe CGT or not.
If it's less that the four times the allowance then no need to declare it unless you do owe CGT - obviously the allowances have changed big time.
If you just get rid of at the same time it vests then you shouldn't need to file a self assessment, unless you discover that the tax is wrong.
It's would be a real pain not to maintain these calculations as you go, even if they are not needed yet. Best to do it and then save your self a real ball ache should it be needed.
They rarely got it right, sometimes way out so you need to do your own calculation.
If you are not disposing of it all when you get it, then you also need to keep a track of vested stock in a Section 104 holding, maintaining the average. You then measure proceeds / losses against that holding for CGT purposes. You need to track this is GB pounds using the HMRC exchange rates.
If you liquidate more than four times the CGT allowance in a year, then you need to declare it on self assessment, regardless of wether you owe CGT or not.
If it's less that the four times the allowance then no need to declare it unless you do owe CGT - obviously the allowances have changed big time.
If you just get rid of at the same time it vests then you shouldn't need to file a self assessment, unless you discover that the tax is wrong.
It's would be a real pain not to maintain these calculations as you go, even if they are not needed yet. Best to do it and then save your self a real ball ache should it be needed.
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