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Ann: Section 708A Notice and Appendix 2A, page-99

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02/07/20

12:14

Post #: 45595313
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Originally posted by TerribleTadpole: ↑

Wrong. If the options are related to employee performance or other remuneration the difference between exercise price and prevailing share price is counted by the tax office as salary income. That means it's subject to PAYE at the employee's marginal tax rate (42%). That means it's payable to the ATO within 28 days. Do the sums. It's a big bill. And if he had to borrow the money to exercise the options then that has to be paid back too. It's typical for an employee to have to sell up to half their newly acquired shares to cover their costs.

The base price for capital gains tax calculation on the newly acquired shares is the prevailing share price when the options are exercised. That's because the difference between exercise price and market price has already been taxed as income.

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"That means it's subject to PAYE at the employee's marginal tax rate (42%)"

I do not believe that is correct. You have the option of asking your employer to take out the marginal tax or otherwise the employer (ResApp) has to advise ATO by 14th July 2021 and you pay when your normal tax return is due.

RAP Price at posting: 16.5¢ Sentiment: Hold Disclosure: Held
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