The 24-month Section 102 holding period
Why the trustee holding period decides whether your RSU gain is taxed at 25% or as ordinary income.
The rule
Under the Section 102 capital gains track, shares must stay with an Israel Tax Authority-approved trustee for at least 24 months from the grant date. Meet the period and the post-vesting gain can be taxed at 25% capital gains instead of marginal income rates.
Selling before 24 months
If you sell, transfer, or release the shares before the 24 months are up, the tax benefit can be forfeited and the entire gain may be taxed as ordinary employment income at rates up to 47% (plus the surtax). This is the single most expensive mistake to avoid.
Counting your timeline
The clock starts at the grant (allocation) date, not the vesting date. Ask your trustee or HR for the grant date and the plan letter, then count 24 months forward before you plan a sale.