Release of Share Options

If a cash payment is received by an option holder on the release of a share option how is the income tax paid?

Where a person realises a gain by the exercise, assignment or release of, a share option obtained by that person on or after the 6 April 1986, as a director or employee of a company, that person will be chargeable to tax under Schedule E for the year of assessment in which the gain is so realised, as a chargeable person.

Notwithstanding this any cash payment chargeable under Schedule E, by virtue of the release of a share option, should be paid through the company payroll and is subject to PAYE and PRSI in the normal manner.