My employer has an employee share purchasing plan which allows employee to buy a limited amount of shares with a discount. I now have some questions on how the sold ESPP share should be calculated in taxable income as ESS and CGT.
My example is the purchase price my employer offers is $10. I bought 1000 shares and at the purchasing day the market price for each share is $30 due to recent surge. Eventually, I sold all the shares 5 days later at the price $33.
A friend told me this income should be declared under both ESS and CGT.
For the ESS part, it will be (market price - purchase price) * shares = (30 - 10) * 1000 = $20000
And for CGT, it is (sold price - purchase price) * shares = (33 - 10) * 1000 = $23000
I am totally confused and it seems double taxed to me. My income from these 1000 shares is just $23000, but with this calculation the overall taxable income is $43000?
I thought a more reasonable way for CGT is (sold price - market price) * shares = (33 - 30) * 1000 = $3000, thus the total taxable income is still 20000 + 3000 = $23000.
Can someone shed some light? Thanks in advance.
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