Revolut has opened a secondary share sale that lets employees sell stock at a $75 billion valuation, Bloomberg reported on September 1, 2025. An internal memo put the price at $1,381.06 per share, and the company has already drawn demand from new and existing investors. For employees who live in the United States, or who hold the stock after moving here, a liquidity event at a foreign private company comes with a distinct set of US tax questions.
What happened
Secondary sales let employees and early holders sell existing shares to investors without the company going public. They have become a common way for late-stage private companies to reward staff while delaying an IPO. Revolut, the London-based financial app, has used such sales repeatedly. The latest price gives employees a concrete value for equity that had been illiquid and hard to price.
Who is affected
The tax picture depends on where a seller lives, where the equity was earned and how it was acquired:
- US citizens and residents are taxed on worldwide income, so a US-resident employee selling Revolut shares reports the gain on a US return regardless of where the company is based.
- Employees who earned equity abroad and later moved to the US, or who split time between countries, may owe tax in more than one jurisdiction on the same income.
- Option holders face two potential events: ordinary income at exercise for many option types, and capital gain or loss on the later sale.
- US angel and fund investors buying in the round take a cost basis at the new price for any future gain.
The after-tax math
Long-term capital gains treatment requires holding shares for more than one year before selling, according to IRS Topic 409. For 2025, the 20% federal rate applies once taxable income exceeds $600,050 for married couples filing jointly or $533,400 for single filers. Short-term gains are taxed at ordinary income rates. On top of that, the 3.8% net investment income tax applies to gains when modified AGI exceeds $250,000 for joint filers or $200,000 for single filers, per IRS Topic 559.
Example: a US-resident employee with high wages sells 100 shares at $1,381.06, receiving about $138,000. Assume, for illustration, a cost basis of $10,000 from shares acquired more than a year ago. The gain of about $128,000 would face the 20% rate and the 3.8% surtax, about $30,500 of federal tax before any state tax.
| Scenario | Illustrative federal rate on the gain | Tax on a $128,000 gain |
|---|---|---|
| Held more than one year, top bracket, NIIT applies | 23.8% | About $30,500 |
| Held one year or less, assumed 37% ordinary rate plus NIIT | 40.8% | About $52,200 |
If a foreign country also taxes part of that gain, US taxpayers can generally claim the foreign tax credit on Form 1116, which reduces US tax dollar for dollar for qualifying foreign income taxes paid on the same income. The IRS notes that the credit is usually more valuable than deducting foreign taxes, and unused credits can be carried back one year and forward up to 10 years.
Moves to discuss with your advisor
- Holding period dates. For shares acquired through option exercise, the capital gains clock generally starts at exercise, so confirming exact dates before tendering shares matters.
- Sourcing of income. Employees who worked in multiple countries during vesting often need an allocation of equity income between jurisdictions, which drives foreign tax credit limits.
- State residency. A recent move from or to a high-tax state can change who taxes the gain.
- Partial sales. Selling only part of a position can manage bracket and surtax exposure, while keeping upside in a company that remains private.
- Reporting. Foreign accounts and brokerage platforms used to settle the sale may carry additional US disclosure requirements.
What to watch
The final size of the sale and the list of buyers have not been disclosed. Employees at other late-stage private companies are watching whether large secondaries keep replacing IPOs as the main route to liquidity, which would make these cross-border tax questions routine for a growing number of US households.
Sources
- First reported Revolut Begins Secondary Share Sale at $75 Billion Valuation — Bloomberg
- Topic no. 409, Capital gains and losses — IRS
- Topic no. 559, Net investment income tax — IRS
- Foreign tax credit — IRS
After TAX is an independent publication. Articles are general information, not tax, legal or investment advice. Consult a licensed professional about your situation.
