Tax Tip: Share Options

Incentivise your key employees by granting them share options under the Key Employee Engagement Programme (KEEP).

KEEP is intended to help SMEs that carry on certain types of trade attract and retain talent in a highly competitive labour market.

Under normal rules income tax (including PRSI and USC) is charged on a gain on the exercise of stock options. However, gains realised on the exercise of qualifying KEEP options by employees and directors will not be subject to income tax, PRSI or USC, where all the qualifying conditions are satisfied.

Capital Gains Tax will arise on a subsequent disposal of the shares, at which time the sales proceeds will be available to discharge the tax due. The overall value of options that may be granted to an employee is €300,000.

To find out more about the KEEP scheme or to arrange a consultation with one of our advisors please contact Marguerite McKenzie on or 021 4321321

*This article is written in general terms and should not be relied on as a comprehensive summary of the relevant tax law.  Advice should always be sought before any action is taken.

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