Share option scheme under EMI to compensate for us selling our company to other company. But they failed to set up the scheme, gave excuses and delay tactics, and by time we found out it was too late as company had turned into massive complex group. After legal case started, company offered us a cash settlement to try to reflect lost shares value as this was simpler than trying to find a way of giving us shares in the "right" component of the group (some of which was now overseas). Compensation was paid to us gross, not through payroll.
So ... is this PAYE/NIC? Or can we argue CGT on basis that shares would have had no value back when we should have been exercising, so the compensation is for the lost capital gains we would have made?
Replies (8)
Please login or register to join the discussion.
Do you honestly believe that you have given enough information even to begin to answer your question?
There is still some detail missing. The way you describe it, you have money that (perhaps) reflects the growth in value you lost out on, but nothing for the value of the shares you had until 2008. It's possible that what happened then (ie in 2008) would be relevant now. Maybe worth going back to the accountant who advised you about that transaction?
You need advice here, I think, and - without knowing the terms either of the 2008 deal or of the legal settlement (by which I mean, without seeing the documents) - that's going to be difficult to provide.
I'm also thinking that, if you have given away all right of further action eg to compensate you for a potentially worse tax position, you (and your legal advisor) are muppets. Maybe you should see a different legal advisor for a second opinion. Similarly, if your accountant in 2008 wasn't up to much, get a new one.
The number of people that, after a brief AWeb discussion, say, essentially, “yeah we know our situation is unique and we need advice – we just wondered what that advice will be” is getting silly.
It's not unreasonable to assume an income tax charge here, tbh, but it is anything but certain.
You might want to look at the HMRC guidance at
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg12060
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg13015
as a guide to the likely treatment