ERSM70425 - Securities Acquired for less than Market Value

Residence: UK duties before permanent arrival in the UK

Where the employee is partly within the UK tax net before becoming resident in the UK, by performing UK duties, then part of the gain relating to the non-UK work before arrival may be excluded from the computation.

Example

Hannah Matthews is resident and employed in the USA and is granted a legal option over shares with a three year vesting period. In each of years 1 and 2 she spends 3 months working in the UK and for year 3 moves to the UK to work here full-time. She exercises her option at the end of year 3 making a gain of £5,000.

The gain of £5,000 will create a notional loan, but the loan will be reduced by the non-UK working periods: