Unapproved share option schemes

  1. Overview
  2. Taxation of a short option
  3. Taxation of a long option
  4. How to calculate and pay Relevant Tax on Share Options
  5. Capital Gains Tax

How to calculate and pay Relevant Tax on Share Options

Rate of tax

The Income Tax (IT) and Universal Social Charge (USC) due on the exercise of a share option is known as Relevant Tax on Share Options (RTSO).

You must pay IT and USC at the higher rate. You must also pay Pay Related Social Insurance (PRSI) using the rate of the PRSI Class applied to you for the tax year.

Paying at the lower tax rate

Your income from all sources for the year might be chargeable at the standard rate (20%). If it is, you may apply for approval to pay:

  • IT at the standard rate of tax
  • a lower rate of USC.

You can apply for approval to pay at the standard rate of IT or a lower rate of USC:

Note

This approval must be obtained in advance of paying RTSO to the Collector-General. If approval has not been given you must pay tax at the higher rate.

How to pay

You must pay RTSO within 30 days of exercising the options. The 30 day period includes the exercise date.  You can make your payment using:

You must complete a RTSO1 Form when making your payment. Send the form to the Collector-General's Office. Interest charges can apply for late payment of tax.

Filing your tax return

You must also complete a Income Tax Return (Form 11) under self-assessment for every year that you exercise, assign or release a share option.

Next: Capital Gains Tax