US Stock Option Shares
My client who works for Microsoft in the UK and is a UK resident, recently sold there stock option shares on Smith Barney and as part of the process, 40% tax was automatically withheld during the sale.
Will the sale of these stock options also be liable to capital gains tax on their 2011/2012 SATR if the gain is over £10,600?
Will the tax already paid through Smith Barney count as a foreign credit tax relief?
Your help would be much appreciated I have been searching everywhere but cant seem to find a concrete answer.
Comments
Clarification.
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Mon, 13/02/2012 - 11:19 |
Permalink
If it is on the P60, then you're done. If the option pushes the dude into the 50% bracket then of course more tax would be due.
US cap gains
1) Assumptions: Your client is not a US resident, does not have a greencard, and did not meet the physical presense test for US residency (approx 4 months in US or more).
2) It's taxed as wages. No cap gain reporting required at all.
3) 40% sounds like UK tax withholding. If so, it should be reflected on a payslip, which would have flowed through to his P60. Obtain his payslips to see if that is the case. Sometimes it's on a separate payslip or on a P11d. Confirm it is UK tax and whether or not it's already on his P60 or P11d.
4) If it's US tax (highly unlikely as their rate is 30%), then obtain the 1042-S and/or 1099 showing the US tax withheld and arrange for a full refund by filing a US tax return. Someone like me files these things for your client.
5) You can't take a tax credit in the UK for a fully refundable withholding tax from another country.
www.BritishAmericanTax.com