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Posted Mon, 12 Feb 2024 14:31:06 GMT by
Good afternoon, The company I work for is offering me to take part in a growth share scheme as a way of an incentive. In order to decide whether it’s convenient for me to accept it, I would like to understand how much tax I would need to pay. My understanding is that when acquiring growth shares, if the amount I pay for the growth shares is less than their unrestricted market value, I would be subject to income tax and national insurance contribution which should be paid upfront, despite the growth shares having a vesting period of, for example, 4 years. My question is: how can I pay an upfront income tax for shares which may yield no return in 4 years time? In other words, how can I pay an income tax for something which has not yet generated an income? In the event there is no return in 4 years, would it be possible to recover the upfront tax? Thanks
Posted Thu, 15 Feb 2024 15:32:17 GMT by HMRC Admin 5

You will pay tax and national insurance via your normal salary and once the sahres then vest, they may be liable to capital gains tax.
Please see guidance at Tax and Employee Share Schemes

Thank you
Posted Wed, 21 Feb 2024 08:08:43 GMT by
Thank you for your message. I am still not clear. I already pay income tax and national insurance on my salary. Could you please clarify whether I would need to pay any additional income tax and national insurance tax on the growth shares before they vest and, if yes, how would that be possible since they have not generated any income yet? Thanks
Posted Wed, 21 Feb 2024 12:23:40 GMT by HMRC Admin 10
The shares will form part of your P60 income until they actually vest. Nothing extra would be due until the actually vest.

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