Stocks and Options

[MarillionFan]

Dear Panel

I am a presently a permie who sometimes (from time to time) moves from perm to contractor for a few years before going back perm for a couple of years.

As part of my present package I have both shares and options. I am also fully aware that as I take these options I will need to pay full tax on these shares and options. Does anyone know of the best methods to maximize the returns and minimize the tax even if that means going contractor.

I have asked my accountant who has told me to consult an IFA. Any clued up people on here?

[northernladuk]

I know this might be a bit of a ridiculous suggestion... but why not contact an IFA as suggested? No one in the family knows one personally you could have a chat with and get a proper opinion rather than one that might be lead by his commission?

I think you should have a word with AtW who will have some 'friends' to whom you could gift them and would make them disappear from the eyes of the authorities for you.

[jamesbrown]

I know this might be a bit of a ridiculous suggestion... but why not contact an IFA as suggested? No one in the family knows one personally you could have a chat with and get a proper opinion rather than one that might be lead by his commission?

There's a thought

To even pose the question, you must be talking about a worthwhile amount, so I would take the advice from your accountant and get someone to look into your specific circumstances

[LisaContractorUmbrella]

IANAIFA and I wouldn't have thought anyone would be able to come up with a sensible answer without a full understanding of your current financial position - IFA definitely the way to go

[bobspud]

This might help you

HM Revenue & Customs: Venture Capital Trusts

[eek]

This might help you

HM Revenue & Customs: Venture Capital Trusts

I think it gets worse than that. My guess is that the shares and options are listed on a US stock market and they will want their grubby paws on some of the money.

To be honest you need both good IFA and possible advice from a good international tax specialist.

[MarillionFan]

I think it gets worse than that. My guess is that the shares and options are listed on a US stock market and they will want their grubby paws on some of the money.

To be honest you need both good IFA and possible advice from a good international tax specialist.

They are indeed. And that's the issue. Need to find someone clued up in UK salary / income plus US listed shares. Fairly certain it's a foregone solution and regardless I'm going to get well and truly hammered but was hoping someone may have some suggestions before I proceed to waste my time on UK IFAS that won't have a clue.

Someone with international. Good suggestion

[BlasterBates]

I would sell them, particulary if the stock has been going up.

Basically you´re liable for tax as soon as you receive shares at a lower than market price and/or options mature.

Microsoft employess were given options/shares which shot up and when they matured they hung on to them. Unfortunately they crashed so instead of being millionaires they owed several hundred grand to the IRS. The tax man doesn´t care about the fact you´ve lost it all.

You need to at least pay off the tax bill. If it is a lot of money it´s not a good idea to have too much riding on one share, particularly as when the share crashes then that is the most likely time to lose your job as well.

[Craig at Nixon Williams]

An IFA isn’t necessarily going to know that much about the tax treatment of your stocks/options, especially if they are foreign shares – if you approached them with a view to reducing your tax liability then I imagine that they would try to get you to contribute to a pension, invest in a VCT or another tax efficient investment. Whilst these will reduce your overall tax liability, remember that you will have to put your cash at risk in order to achieve this and the tax saving will not be directly on the disposal of the stocks/options.

If the shares/options have been awarded through some sort of tax efficient share scheme then there may be some relief available to you. I would advise you to speak to your accountant again about this – they will need to know quite a lot of detail about how they were acquired (such as through any schemes etc.) though if it is a foreign holding then it may be better to speak to a foreign tax specialist regarding any foreign tax that you may be liable to.

Hope this helps!
Craig