Deferred share awards made overseas may be described as
Restricted Stock Units (RSUs) or be a feature of Long Term
Incentive Plans (LTIPs) or other arrangements. Normally they are
structured as a promise to give an employee shares at sometime in
the future if certain conditions are satisfied. Such a promise may
be made in respect of an employment whilst the employee is not
resident and not ordinarily resident in the UK.
If the employee subsequently becomes resident in the UK, or
undertakes duties in the UK which give rise to general earnings
within Chapter 5 Part 2 ITEPA 2003, the shares may vest or be
acquired whilst the employee is within the scope of UK tax. The
LTIP or RSU may or may not be a legal option (an option
contractually enforceable on its own terms – see ERSM110010)
and this affects whether there is an Income Tax liability as
discussed below.
This treatment extends to a UK domiciled employee resuming
residence and ordinary residence in the UK after working for a time
in another country.
See ERSM70410.
LTIP awards which:
will be chargeable either as money’s worth under
ITEPA03/S62 or alternatively, if not money’s worth, under
Chapter 3C.
If in doubt about whether something is moneys worth (that is,
realisable for cash) please refer to Employment Income Technical
Adviser.
