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Company share deal, should I invest?


Dave Bloke
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Dave Bloke

I work for a big multinational French co. The shares are pretty moribund to be honest.

There is a employee share offer at the moment, here are the details:

Up to 10,000 euros, the price will be 30% under the market price. So a 10 euro share will cost 7 euros.

For the first 1800 invested the firm will give another euro for free. So 1800 euros buys 3600 euros of shares. However the dividends are split 50:50.

Between 1800 and 4000 euros the firm will give 3 euros for every 7 euros invested.

an 1800 euro investment is a no brainer as you can't lose. I'm just wondering how much to buy. The shares dropped 30% at the start of Covid and have not recovered.

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Frank Hovis

It depends how much spare cash you have that you can afford to tie up.

I would buy 10,000 without a second thought; I always bought the max each year when I had a similar share discount scheme available.

And in my most fortunate piece of financial good fortune ever they accidentally paid me out the whole amount twice when I cashed them in on leaving B|

I was nabbed by the taxman when they sent the records across but I paid the extra tax and wasn't fined.

I was amazed that they hadn't picked up that they had paid me twice when they did the year end rec. And fifteen years on I think it rather unlikely that they will now do so.

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SpectrumFX
4 hours ago, Dave Bloke said:

5 years.

If you can afford to tie up the funds for that long, then it's basically a punt on the company's 5 year prospects.

 

 

 

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17 hours ago, Dave Bloke said:

I work for a big multinational French co. The shares are pretty moribund to be honest.

There is a employee share offer at the moment, here are the details:

Up to 10,000 euros, the price will be 30% under the market price. So a 10 euro share will cost 7 euros.

For the first 1800 invested the firm will give another euro for free. So 1800 euros buys 3600 euros of shares. However the dividends are split 50:50.

Between 1800 and 4000 euros the firm will give 3 euros for every 7 euros invested.

an 1800 euro investment is a no brainer as you can't lose. I'm just wondering how much to buy. The shares dropped 30% at the start of Covid and have not recovered.

Be very aware of the tax implications.  In some countries they see the difference between paid and market price at time of grant as taxable income.  I got stung by this in Hong Kong.

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Yadda yadda yadda
On 24/09/2021 at 12:54, Frank Hovis said:

It depends how much spare cash you have that you can afford to tie up.

I would buy 10,000 without a second thought; I always bought the max each year when I had a similar share discount scheme available.

And in my most fortunate piece of financial good fortune ever they accidentally paid me out the whole amount twice when I cashed them in on leaving B|

I was nabbed by the taxman when they sent the records across but I paid the extra tax and wasn't fined.

I was amazed that they hadn't picked up that they had paid me twice when they did the year end rec. And fifteen years on I think it rather unlikely that they will now do so.

I'm struggling with the concept that you paid tax other than council tax.

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Frank Hovis
2 hours ago, Yadda yadda yadda said:

I'm struggling with the concept that you paid tax other than council tax.

I wasn't going to do so as I hadn't declared it and thought it wouldn't be picked up.

Though as it was my only taxable income that year it was at basic rate.

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Dave Bloke

The funny thing about the company is that where I work it is full of lifers who remember the millenium when the shares were trading at 100x their current value and everyone was a millionaire and hoping for more. They used to drink champagne for breakfast in the canteen and all that. Then the shares crashed and no-one had cashed in. Doh. So here they all are, long faces, sitting around waiting for their early retirement package.

I had a friend at Citrix who was in a similar position. The day his shares equaled the size of his mortage (around 300K), he cashed in and paid off his debts. His colleagues thought he was mad "This time next year Rodney, you could be a millionaiwre". He was the only person he knew who cashed in.

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On 25/09/2021 at 04:00, wherebee said:

Be very aware of the tax implications.  In some countries they see the difference between paid and market price at time of grant as taxable income.  I got stung by this in Hong Kong.

I got similarly stung in the UK with RMG company scheme shares that I'd purchased because I hadn't held them for the requisite full 5 years in order to negate the tax liability on them before leaving the company.

The tax liability transferred from the 20% tax and I'd 'avoided' paying when purchasing the shares from my pre-tax income (circa £350) to 20% of the value of the shares when I left the company... that 20% of the value of the shares amounting to £ 1,800.

OK so the shares had done well in the time I'd been purchasing them through the company scheme but it still feels like a stealth CGT tax to me.

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