I EXERCISED US-based stock options last October through my American employer and paid income tax on the difference between the exercise price and the original grant price. I kept some shares but they fell dramatically in price. As I didn't realise any 'income' from these unsold shares, is there any way I can recoup this tax to the Revenue other than through future capital gains allowance? It is inequitable that the IR expect income tax on money which has never been income! Is anyone lobbying the Government for a change in this outrageous tax? PB, Farnham.
Maurice Fitzpatrick, a tax director at Tenon says: Now that stock markets are falling there may well be many others in your position but I have not heard of any campaigns to change it.
There are no other ways you can recoup your loss except by using it to offset any future capital gains. Note that you CAN get income tax relief for losses on new shares that you have subscribed to in unquoted companies (including AIM and OFEX companies) but this applies to UK companies only. Had your company been UK-based you might have been able to claim this.
An Inland revenue spokesman says: 'We have had quite a few questions about this recently - especially from Railtrack shareholders.