Some employers offer a share-based payment to their employees or options to buy shares within the company through an employee share scheme. But are you aware of your tax implications if you are in receipt of these shares? Do you know if your shares are subject to benefit in kind or Capital Gains Tax?
You are not alone. The area of employee share schemes can get confusing and often communication between the employer to the employee about their tax responsibilities is lacking.
The 2 most popular types of employee share schemes are, Restricted Stock Units (RSU’s) and Employee Share Purchase Plan (ESPP’s). Below we simplify and highlight the stages in which tax may apply for these share schemes and declaring same.