4 ms·
That's interesting, I never heard of reverse vesting. I thought you'd be liable for capital gains tax (since you're making a "gift to the company/cofounder", yo
by berdario 5y ago
That's interesting, I never heard of reverse vesting. I thought you'd be liable for capital gains tax (since you're making a "gift to the company/cofounder", you'd have to use the real market value of the gift to compute CGT), but it seems that the tax rules have a special case defined exactly for this circumstance:
https://www.gov.uk/gift-holdover-relief https://www.gov.uk/gift-holdover-relief
(of course, this depends on jurisdiction)
- glenngillen 5y agoAt the risk of making sweeping generalisations about tax law interpretations in multiple jurisdictions… I’ve lived in numerous countries and they’ve all applied either one or both of the following to such a situation: * the shares are deemed “at risk” because of the exit clause, and so are not yet taxable. In Australia _I think_ you need to explicitly declare that treatment in the first tax return that the event happens, and you’d be losing some of the benefit of the long term capital gains tax discount as a result. I’d need to double check with my accountant on the specifics, but I know he suggested such a thing at one point. * the nominal value at the time is tiny fractions of a cent per share because the company has no assets or income. So you just take the tax hit, which ends up being something like $1.