European Stock Option Plans
Cashless Exercise facility for UK residents
Do you work for a subsidiary of a European parent company?
Our European Stock Option Plan facility enables residents in the UK to exercise their stock option in their parent company, listed on a range of European countries markets.
We understand the importance of the client experience and offer the participant care and assistance when exercising their option. We offer:
- Finance arranged in Euros to fund the option cost
- Share Dealing to sell the resulting shares
- Tax liability sent directly to company
- Online or paper receipt of instructions
- Price limit so the participant can sell at their pre-determined price
- Dedicated Helpdesk for share plan enquiries
- Sale proceeds sent directly to the participant
Holding overseas stock
Once you have exercised your stock option, if you have a balance of shares, you generally have to hold these in a nominee account.
Some of the features of our nominee account are below:
- Online or telephone trading
- Stock option balance credited to your account
- Portfolio feature to view the value of your investments
- Diversification of portfolio as you can trade in other stocks on a variety of exchanges.
European Stock Options Explained
A share option granted by a company to an employee, is a right to buy a share at a fixed price, the option price, generally after a qualifying period.
The profit on exercise, the difference between the sale price/market value and the option price, is normally subject to either Capital Gains Tax or income tax and National Insurance Contributions (or equivalent), depending on the structure of the plan.
Mr Smith has been awarded 30,000 shares in Euro plc at an option price of €1.00, which he will be allowed to exercise after a set period. Share price on exercise is €2.50
| Sell to cover option cost | € |
|---|---|
| Option cost loan | (30,000.00) |
| Shares sold to option cost loan = 12,000 (€30,000.00 / €2.50) | 30,000.00 |
| Net proceeds after sale and deduction of liabilities | 0.00 |
| Balance of shares received = 18,000 | |
| Profit calculation for tax liability | |
| Current value (12,000 x €2.50) | 30,000.00 |
| Option cost (12,000 x €1.00) | (12,000.00) |
| Profit on exercise | 18,000.00 |
| Profit converted back to Sterling at 1.25 | £7,200.00 |
| Sell all shares | |
| Sale proceeds from sale of 30,000 at €2.50 | 75,000.00 |
| Less | |
| Option cost loan | (30,000.00) |
| Total net proceeds | 45,000.00 |
| Proceeds converted back to Sterling at 1.25 | £36,000.00 |
Profit and Proceeds could be subject to tax , depending on the structure of the plan granted
Please note that this example does not include, or allow for, any fees or charges