Hi All,
Long time forum and site lurker here, some way into my mustachian journey from somewhat inauspicious beginnings, but that's the subject of another post...
I'm an Australian citizen, resident in Sydney, for a long time I worked in the UK and I'm fortunate enough to hold a decent number of options in a company that's likely to IPO on the London Stock Exchange this year. Everything I read suggests that tax treatment for selling as part of a overseas IPO looks like effectively buying (at the option price) and selling (at the IPO price) in the same moment, so the whole profit amount will be subject to CGT, and this will push me well into the top marginal bracket, effectively 47% tax inc medicare levy.
The other option is for me to purchase the parcel of shares at the option price, and hold for a while. Most IPOs seem to be priced so that there will be a bit of a "pop" to the price in early trading, so it seems like there's a reasonable chance of a small short term profit for some of the shares. The rest I'd like to hold for a year before selling - because of the CGT discount I will be effectively insured against up to a 30% share price drop, and anything better than that will be much more profitable because of the 50% CGT discount. (I'm not thinking of holding long term at the moment)
I don't currently have a brokerage or trading account, but I'm looking to set one up with a provider that can provide me with access to the LSE for being able to sell when I choose to. From the options documentation I hold, it looks like if I choose to purchase these shares as opposed to disposing of them at the IPO, I will be acquiring the shares prior to IPO, and would then have to transfer them to a brokerage. I'm just starting to investigate what my options are for doing this sort of thing, but if anybody has any advice they could share as to what would be a good way to do this, I'd be very grateful for it!
Thanks and al the best,
Grant