Unapproved share option schemes

Capital Gains Tax

If you exercise your share option and then subsequently dispose of the share you acquired you may be liable to Capital Gains Tax (CGT). You must report this disposal to Revenue, even if no tax is due. Your employer will not deduct any tax or report the disposal for you.

What you use as a purchase price when calculate your chargeable gain depends if the shares issued at the time of excise were:

  • newly-issued shares
  • shares already in existence.

Newly-issued shares

For newly-issued shares, your cost of acquisition is the sum of the:

  • cost (if any) of the share option
  • price paid for the shares on the exercise of the share option
  • amount charged to Income Tax on the exercise of the share option.

Shares already in existence

Some shares may have already been in existence at the time of exercise of a share option. Where they were, your cost of acquisition is the market value of the shares at the date of exercise.