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Unapproved share options, overseas company

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I have  UK resident client, employed in the UK by an Israeli company listed on the USA stockmarket.  He has been granted share options in relation to this emlpoyment in an Israeli/USA scheme.  Therefore unlikely it has been approved by HMRC.  He wants to exercise the rights in the coming weeks but I am unsure of the treatment when he sells.    However, as an unapproved scheme, am I right that he would be liable to income tax on the exercise date, and CGT on the sale date?   Is it as simple as that?

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By gbuckell
16th Feb 2017 12:13

From your description that sounds the likely outcome. As the shares are quoted the employer will be required to deduct PAYE and NI on the notional profit at date of exercise (market value - exercise price). Market value then becomes base cost for CGT purposes when the shares are sold. If the shares are not sold immediately the difficulty is funding the tax and NI cost.

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By WillowTree
16th Feb 2017 14:59

Thanks. I was researching it earlier and saw the employer obligation if it is a listed company but had assumed this was if it was uk listed. Is this definitely still relevant if listed on another stock exchange?

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By gbuckell
16th Feb 2017 16:56

Yes - the rules apply to "readily convertible assets" which can include those listed elsewhere or even unlisted shares where arrangements are in place to allow a sale.

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