TAX QUESTIONS? YOU ASK LAH!

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Q: My company offers me share options. Do I have to pay tax for this? If yes, do I pay tax when they are being granted, when they are being exercised, or when I sell the shares?

A: Tax liability only arises when the options are being exercised. The difference between the market value of the shares and the exercise price is treated as a taxable perquisite from employment income. When you subsequently sell the shares, gains derived from individual taxpayers are generally treated as a capital gain. However, an individual is not subject to Capital Gains Tax (CGT).

Wishing you plentiful tax savings!

Zen Chow

YYC Tax Guru

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