Company Shares Taxation

While employed the Company allowed employees to buy discounted shares, when redeemed what is taxable, the total or the gain?

Hi Rubi57mc,
It depends on the type of share as some are not taxable.
If you are liable, it will be on the gain.
Thank you. 
 

the shares were options which were purchased by me over 12 years thru salary deductions each holding paid back over two years (described as an employees savings plan) and had to be held for 5 years to avoid certain criteria avoiding penalties . The dividends were ALL reinvested with NONE actually taken. If they were taxable and for example i wished to take 10K how would the gain be calculated?

Hi Rubi57mc,

Have a look at the guidance belowc, it will tell you whether there may be capital gains tax or income tax to pay.  
Tax and Employee Share Schemes.

Thank you.

Hi sorry for delay. I have possibly made a significant omission on my question. My employer was outwith the UK, France to be precise, the purchase criteria did specify an upper limit not exceeding 10% but did exceed 1,800 over two years, this being the period whereby the share payment was deducted. A period of 5 years was specified which advised penalties would be incurred if taken within the 5 years. ALL dividends were reinvested which appears similar to the UK's criteria. Any change to your advice?

Hi Rubi57mc, 

If you get shares through a Share Incentive Plan (SIP) and keep them in the plan for 5 years you will not pay Income Tax or National Insurance on their value.
You will not pay Capital Gains Tax on shares you sell if you keep them in the plan until you sell them.
If you take them out of the plan, keep them and then sell them later on, you might have to pay Capital Gains Tax if their value has increased.

Shares acquired or awarded under a SIP are held on behalf of the scheme participant by the scheme trustees, who receive any dividends paid under the scheme.
Cash dividends may be reinvested in further shares and are called “dividend shares”. These are exempt from income tax under ITTOIA05/S770.

ITTOIA05/S392 to S396 form part of the SIP code. The sections set out the tax charge that arises if:
the trustees do not reinvest the dividends but pay over the cash dividend to the participant, or;
the dividend shares cease to be subject to the approved SIP.

S392 sets out the tax charge, which applies only if the participant has benefited from the tax advantages of an approved SIP. Under S393 any amount not reinvested is taxed (and any entitlement to tax credit is determined) for the tax year in which the dividend is paid over to the scheme participant rather than the year in which it was originally paid. The scheme may only hold on to a cash dividend and carry it forward for three years from the date of payment.

If a participant does not use the dividends received from their plan shares to buy more shares in this way, they will be taxed in the same way as other dividends and if the participant is a higher rate taxpayer, they will need to enter the details on their Self Assessment Tax Return.

There are equivalent rules for SIPs involving shares in non-UK resident companies in ITTOIA05/S405 to S408, so it makes no difference that the employer is based in France.

Employee Tax Advantaged Share Scheme User Manual
 
ETASSUM29000 - Schedule 2 share incentive plan (SIP): Taxation: Contents