genou wrote:TheMotorcycleBoy wrote:Another thing that I'm uncertain about regards my tax return, is whether I need to mention the sales of my Qualcomm (employee grant) stocks in the CGT summary. ... Twice a year I'm given a number X of shares, but in order to cover my income tax ETrade (the broker we have to use) sells a reasonable portion of these leaving Y number of shares and a small amount of $ change. This happens as soon as the shares vest. As far as I'm concerned the residual Y number of shares and the change represent income which has already been taxed. I then sell these shares at once (on vesting day), typically making a small loss. Then I bring the money back to the UK at that point converting into GBP in the process.
thanks again,
Matt
What sort of a scheme is it ? There is a reasonably intelligible analysis here -
https://uk.practicallaw.thomsonreuters.com/1-503-1411?transitionType=Default&contextData=(sc.Default)&firstPage=true
Hi Genou,
Qualcomm is an American firm, and we have to dance to their tune. I followed your link and the type of scheme that sounds the best fit is "Share Incentive Plan - Free shares". I guess that they *aren't* options because we don't actually buy the shares, they just appear in an account. Basically it's how I described above, i.e. we are all given an ETrade employee brokerage account, and that's where this part of our "rewards" appear, and thus we have to manage it ourselves once Qualcomm and Etrade figure out the income tax and NI part (see my following 1.)
1. According to ones position+performance we are periodically given X shares. Since these are part of our remuneration package there are income essentially, so X times about 0.45 of these shares are immediately sold by Etrade
when the shares vest, and monies used to pay the UK income tax and NI. Those sale orders are called "restricted stock unit sell-to-cover" orders, and AFAIK that's standard fare in the US. Etrade pass this money back to our payroll, I assume, so that they can deal with each employees tax and NI relating to the implied income due to these "free shares".
2. We then have approximately 0.55 * X shares left in the brokerage account. Up to each employee what to do with these. Some people accumulate the divs and the holdings, since we get tranches allocated each year (each of which vest in separate bi-annual lots over a 3 year period). I sell mine immediately at vesting date, in order to hopefully avoid CGT hassles with various differing FX rates, and also because I'd rather get the money back into my UK-facing ISA and SIPP.
So I'm thinking the GBP value of my holdings (after the sell-to-cover sales for tax/ni) is what I put box "25. Allowable cost (including purchase price)" on my CGT summary and the GBP value of the money I receive after share sales and FX conversion costs is what I put in box "24. Disposal proceeds". Does that make sense?
What this would imply is that for someone who lets their stocks accumulate for 5 years after vesting before they sell, then we they do their equivalent
box 24. minus box 25. they will get a reasonable size positive number - and that would be their "capital gain".
However for me, when I make the same subtraction I get a small negative number, since I sell straight after vesting date, and hence see only the costs and no gain on the shares over on the NASDAQ.
Does that help you help me answer my question?
thanks Matt
PS I wish they'd just give me the money!