Taxes Consolidation Act 1997 section 515

Excess or unauthorised shares

Section 515 sets out the rules for excess and unauthorised shares in an approved profit-sharing scheme (APSS), including the annual limits on tax-free share appropriations and the special tax treatment that applies when those limits are breached or shares are appropriated to ineligible participants.

• A participant may receive shares worth up to €12,700 in a tax year, or up to €38,100 where shares have been transferred from an Employee Share Ownership Trust (ESOT) and the relevant conditions are met; any shares exceeding the applicable limit are classified as excess shares.
• Shares appropriated to an individual who is ineligible to participate in the scheme are classified as unauthorised shares, and both excess and unauthorised shares are always subject to income tax on 100 per cent of their value at the time of disposal.
• Where a participant holds both normal and excess or unauthorised shares, disposals are treated as coming from normal shares first, subject to the first-in-first-out identification rule.
• Excess or unauthorised shares still held at the earlier of the release date or the participant's death are deemed to have been disposed of immediately before that date at their market value at that time.