On 1 March 2021, Helen was awarded 1,000 shares at a cost to Helen of €500. The market value of the shares at the date of the award was €1,000.
Under the terms of the share scheme plan, the shares are subject to forfeiture if Helen ceases employment before 28 February 2023.
Helen’s tax on shares in March 2021
Description | Calculation | Amount |
Market value of shares
|
|
€1,000
|
Amount paid by Helen
|
|
€500
|
Discount amount added to pay
|
€1,000 – €500
|
€500
|
Income Tax (40%)
|
|
€200
|
USC (8%)
|
|
€40
|
PRSI (4%)
|
|
€20
|
Total taxes
|
|
€260
|
Helen ceased employment with the company on 1 July 2022 and the shares were forfeited. The employer refunded Helen the €500 she paid for the shares.
The tax that was charged on the shares when they were awarded is reduced to nil. Helen is entitled to a refund of €240 (Income Tax + USC).
She must make a claim for a refund of the tax overpaid before 31 December 2026 (Within four years from the end of the tax year in which the shares are forfeited).