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Approved Profit sharing scheme

Approved Profit sharing scheme

Approved Profit Sharing Schemes

Any free shares you receive from your employer are normally taxable.

However, your employer may operate an Approved Profit Sharing Scheme (APSS). If so, your employer may allocate tax-free shares to you, provided you meet certain conditions.

You must pay Universal Social Charge (USC) and Pay Related Social Insurance (PRSI) on the value of the shares. Your employer may also allow you to use your annual bonus to buy shares under an approved scheme.

Your employer can only allocate up to €12,700 in tax-free shares to you annually. You must hold the allocated shares in a trust set up by your employer. If you leave the shares in the trust for three years you will be exempt from Income Tax (IT).

You may instruct the trustee to sell or transfer your shares before the end of the three years. If you do, you must pay IT on whichever is lesser of:

  1. the original shares value
  2. the shares value at the date of sale or transfer.

Details of how the schemes operate, and the requirements for approval are set out in the Approved Profit Sharing Schemes (APSS) manual.

Any queries on the above give me a call on 091 763817 or email me at oliver@taxreturnhelp.ie

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