| Blathering for Friday, 15 May 2009 |
14:45: Mikal shared: Culture war over tax change on employee shares
- Its good to see that other people are annoyed by this change as well. It will certainly affect me.
The basic issue here isn't that I don't want to pay tax. I'm fine with paying my share.
The US system has merit here: you pay capital gains tax on the difference between the strike price and the sale price of the option when you sell the share (i.e. realize some income from the asset).
This new Australian system brings that tax event forward, so that you have to pay CGT at vest time on the delta between the strike price and the market price at vest time. However, you haven't sold the share at that point, so you end up with an unfunded tax liability. Why not just charge tax a sale time? How is that not fair?
posted at: 19:50 | path: /blather | permanent link to this entry