DT1925 - Non-residents: UK income: share option gains, phantom share option gains and bonuses
The words `salaries, wages and other similar remuneration' in Articles of agreements dealing with employment income should be regarded as including -
- share option gains chargeable under ICTA88/S135;
- bonus payments such as those arising under phantom share option
schemes and;
- share option gains chargeable under capital gains legislation.
Share option gains should usually be regarded as accruing evenly
between the grant and exercise dates. If, subsequent to the date
when the option was granted, the employee ceases to be a resident
of the United Kingdom and becomes a resident of a state with whom
the United Kingdom has a double taxation agreement, he may claim
that part of the gain is exempt under the Article of that agreement
dealing with employment income.
Tax bulletin 55 publicised the Revenue's approach in the
most common circumstances. These are itemised in the following
instructions DT1925A and 1925B. If a claim is received that is not
on all fours with these, or when otherwise indicated, it should be
referred to International Division, External Relations Group
(Advisory).
At the start of 2002 the Organisation for Economic
Co-operation and Development (OECD) was working towards reaching an
international consensus on how share option gains should be taxed
and double taxation prevented. Accordingly there are likely to be
developments in this field over the following year or so.
