software doesn't have a specific
mechanism by which to model the receipt
of stock options or restricted stock
units and there isn't a way to parachute
non-cash remuneration such as stock
options into the plan in the way that
you can say employer pension
contributions this means that a
workaround needs to be used and that's
what I'll be showing you in this short
video to do this you'll model the
portion of their income which comes in
the form of stock options as a separate
income stream to their salary and you'll
put it in as other income so you can
select the relevant Taxation and then
this income will be transferred into an
investment and you will be able to use
withdrawal limits to prevent the
software using the shares before they
vest and then use transfers to show the
shares vesting at a future date in this
particular example I'm going to show
that this client gets €50,000 worth of
stock options in year one that goes up
by 10% each year for three years and the
shares will vest 5 years after they've
been received so the first thing I've
done is I've gone to the to timeline and
I've put on events for when the stock
options will be received and then when
they will will be invested and on the
dashboard I'm going to add in the income
equivalent of those stock options so
click on income and other income to call
it stock
options starting amount is
50,000 case it's liable to income tax
you would be able to set the taxation if
you want to put it in as the net amount
you can change it to non- taxable here
I'm just going to leave this one as
income tax
and then you can set the growth rate so
in this
example he he's are expected to go up by
10% each year if the client has a
variable amount you could put them in as
individual windfalls rather than a other
income over several years so in the
timing I'm going to select that the
income starts at plan start and then I'm
going to end it using this stock options
finish event but hadn't already added
the events onto the timeline I could add
a new one here by double clicking on the
bar of the chart so click
done and we can see that we've got that
other income coming in so I've got
50,000 in year 1 55,000 year 2 and
60,500 in year three I now need to
transfer that into Investments but I've
got to set the Investments up first now
if they've got different years when they
vest it's best to put them in to
separate
Investments to add on an
investment going to use a portfolio
account
option call it unvested shares vest 2030
for the first blot I'm not going to put
balance in because I'm going to use
transfers to put the money in and then
under withdrawal limit I'm going to
change the withdrawal limit to scheduled
only so that the software can't draw on
these unvested shares before I want them
to so I'm going to set up the other two
unvested shares
now this is for the second year
that going best in
2031 again go to the withdrawal limit
and change to scheduled only or you may
also want to set um what you want the
growth rate and fees to be as well
then I've got one more lot
of shares to add
on the best
in2 so limit scheduled
only I now can add in a
transfer and I'm going to transfer the
first Year's worth into the unvested
shares which vest into
2030 The Source will be all
Surplus specific amount I want 50,000 in
year 1 future value you can select yes
in transfer before paying expenses so
the transfer gets done before the
software can spend the other income on
other expenses in timing I want that one
to happen in year one of the plan so I'm
using plan
start it's the first transfer
and then going to do the transfers for
year two and year
three pick the next one
down source is all Surplus again this
time it's 55,000 in year two transfer
before paying dispenses yes timing let's
link that to the 2026
event one more transfer
I'm in the 2032 on vested shares sour is
all Surplus this time it's
60,500
transfer before paying expenses yes in
timing it's the 2027
event we can then go to year view to
check that things are happening as we
want them to so in year one I've got
50,000
income coming in and in the Investments
tab I've got 50,000 going into the 2032
on vested shares I move to the next year
I've got 55,000 going into the 2031
unvested shares which matches the other
income coming
in and then in the third year 60,500
coming in which is going into the
unvested shares 2032 that's got the
income
coming in and being swept into the
unvested shares if you then want to show
the shares vesting I'll quickly show you
how to do
that so at the moment these are held in
those accounts with the withdrawal
limits so you can't use them I do a
transfer here when it vests you could if
you're going into cash if they're going
to sell the shares at the vesting point
you could move the money into a savings
account
or if they're going to still hold the
shares but want to reflect that they're
now vested and could be sold at some
point in the future then what you can do
is add on an investment called vested
shares again with no balance this time
leave the withdrawal as limit as it is
as needed set the appropriate growth
rates and you can and
transfer to the vested
shares from the unvested shares and all
available so it transfers everything
including the growth on the
shares go to timing that would happen in
2030 for the first lot of shares in this
example then you can do the same for the
other
shares so going to the vested shares
from
unvested all
available
31 one final
transfer to the vested shares from the
last lot of unvested shares all
available and that one's happening in
20132 and once the chart redraws we can
go to the year View and just check
what's happening if I move along to
2030 we can
see that the shares of vest in 2030 are
going into that vested shares pot in the
next
year and the next year it's happening as
we want it to so I hope you found this
useful if you need any further
resistance do contact vo support in the
usual way