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Subject:   A simple question
From:   Graeme

I hope this is a simple question.

I'm a qualified accountant working for a UK private company and have done my homework on US stock options (my company has one US based employee) and I want to issue NQSOs.

What do I actually have to do to issue these? In the UK, the system is similar to that in the US, in as much as no tax is due at grant of option, but I still have to tell the IR here that I am making a grant so that we can agree on a value and so that they can log this. Do I have to inform the IRS or state tax authority (Ohio) when I am issuing NQSOs to my employee?

Graeme

Answer

Hello Graeme,

There is no notification requirement to the tax authorities until the option is exercised.

I suggest that you have an attorney who works with US corporate law work with your UK corporate counsel to draft your stock option plan.

Good luck!

Mike Gray

For more information about non-qualified stock options, request our free report, Non-Qualified Stock Options - Executive Tax and Financial Planning Strategies.

IRS Circular 230 Disclosure: As required by U.S. Treasury Regulations, you are hereby advised that any written tax advice contained in this answer was not written or intended to be used (and cannot be used) by any taxpayer for the purpose of avoiding penalties that may be imposed under the U.S. Internal Revenue Code.