Employee share schemes Introduction Employees can be provided with shares in their employer company as part of their remuneration The arrangements in place can differ between companies Different schemes can be in place in one employer

Employee share schemes Share options A share option is a scheme whereby employees are granted an option to purchase shares at future date at a fixed price When the option is exercised the employee must pay the relevant tax (income tax at 40%, PRSI at 4%, USC at 8%) on the difference between the exercise (purchase) price and the market value on the date of exercise, within 30 days of exercise

Employee share schemes Share options Form RTSO1 Receipt of a share option will make the employee a chargeable person with an obligation to file a tax return In their income tax computation, the gross amount of the income from the share option is included and a refundable credit is claimed for the tax paid

Employee share schemes Share options If the option is capable of being exercised for more than 7 years after the date of grant, the charge to tax may arise on both; The grant of the share option, and The exercise, assignment or release of the share option, with a credit given for the tax paid when the share option was granted

Employee share schemes Share options On the grant of a long option, the taxable amount is the difference between; The market value on the date of grant, and The consideration for which the share will be acquired when exercised