Share Options

Hiya

A bit off topic..............but was hoping someone could help me.

My hubby has just come into some share options from the company which he works for and which if he cashes in right now will cause him quite a fair whack of Capital gains tax.

Any legit way of reducing this CGT? We do not have a trust of any sort set up as yet.


Open to any suggestions...

Thanks so much
 
My hubby has just come into some share options from the company which he works for and which if he cashes in right now will cause him quite a fair whack of Capital gains tax.

The only way that comes to mind is to exercise them, convert to shares, then hold them for 12 months.... course depends how he thinks the share price will go in the next 12 months...

Cheers,

The Y-man
 
The only way you can reduce CGT is to offset a CG against a CG loss somewhere - but be careful you don't get caught with what the ATO considers a "wash sale".

Otherwise understand that CGT is paid at your prevailing PAYG tax rate - so perhaps try to sell an asset (with a CG) in a year when you are not earning so much....and keep them for min 12 months to be eligible for the 50% CGT discount.

Better still, if you are only after cash, why sell? Just like an IP - refinance it - or in the case of shares, take out a 50% (say) margin loan against them.

Just some thoughts.
 
Hiya

( i have posted this in the wrong subsection so thot i'll post again...sorry)

Hubby has just come into some share options from his company that if he sells will incur quite a big capital gains tax.

Looking for some suggestions to minimise this; trust?? husband/wife transfer?/anything?

would like to hear your valued suggestions.

thanks
 
Depending on your hubby's age, he could increase his salary sacrifice to superannuation. This would decrease his Gross income in the eyes of the tax dept, so if the options are sold, his assessable income would not be as high. There are limits to the amount that can be salary sacrificed with tax concessions.

he could sell some shares/investments that have a capital loss, this could offset part of the capital gain upon selling the options.

Could he exercise the option and purchase the shares, rather than sell the options. This may delay realising a capital gain.

Please check these with an accountant.....

And that would be another thing.....go see you accountant/tax adviser....at least his fees will be tax deductible!!!!
 
Thanks Ol School Skata

Just to clarify, hubby is not selling the options; he will be exercising the options and buying up the shares. This, i'm sure will still trigger CGT at the highest marginal tax rate!!!:eek:

cheers!
 
Thanks Ol School Skata

Just to clarify, hubby is not selling the options; he will be exercising the options and buying up the shares. This, i'm sure will still trigger CGT at the highest marginal tax rate!!!:eek:

cheers!

I believe that exercising options will not trigger a CGT event in this case. Only on the sale of the shares.

Cheers,

The Y-man
 
And when you do convert them to shares, don't forget you can sell down the shares in batches over several financial years to minimise the CGT payable, after you hold them for the 12 months for the 50% discount.
Marg
 
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