The RSU trap: how PAYE withholding and the Nov 15 CGT deadline don't line up.
Why you can owe tax twice on the same share, and the calendar move that prevents it.
The single most expensive mistake we see in a filing season isn't a missed deduction. It's the same RSU-holder, every autumn, paying CGT on a gain that was already taxed through payroll.
The mechanics are simple but the calendar isn't. When a Restricted Stock Unit vests, your employer withholds PAYE, USC and PRSI at your marginal rate, often 52%, on the vesting-date market value. Those shares are now yours. The value at vesting becomes your cost basis for any future capital gains tax calculation.
Two separate tax events, one share
If you sell on the day of vesting, the gain (or loss) is measured from the vesting-day price to the sale price. Same day, same price, near-zero CGT liability. Simple.
Hold the shares, though, and the calendar starts to matter. The gain is now the difference between the vesting price and whatever you eventually sell for. CGT at 33% applies, but on the delta only, not on the original vesting value.
You have already paid income tax on the vesting value. You do not owe CGT on it a second time. You owe CGT only on the growth since vesting.
And yet: every November, filers submit CG1 calculations that treat the entire sale proceeds as the taxable gain. The mistake isn't subtle, it can double the tax bill.
The deadlines that cause the error
CGT on disposals between 1 January and 30 November is due by 15 December. Disposals in December are due by 31 January. The CG1 return itself is filed the following October. That means:
- You pay the tax before you file the return that proves what you owed.
- The payment is made from memory and rough arithmetic, not reconciled figures.
- Many self-filers conservatively overpay in December to avoid interest, then never reclaim.
The calendar move
Before 15 December each year, we run the disposals list against cost basis from your vesting statements and issue an exact payment figure. The Revenue payment is made correctly; the CG1 filed the following October simply confirms it. Interest is never charged because the preliminary figure matches the final.
It is a single working day of effort per tax year. For most clients, it saves four-to-five figures in avoided double-counting.