Selling US stock issued by employer

I am UK citizen living and working in the UK. In 2023 I was issued a Stock Option from my US owned employer. I left the company in early 2024, and my stock option will soon be vested and I can buy / sell. When it comes to selling I am told the US broker will follow the company procedure which is to withhold taxes on the gains of 2% for NI and 45% income tax. My question if this tax is collected by my old employer; where does it then go? I am not on the payroll. And, I plan to sell immediately on vesting. Is capital gain tax applicable.

Hi Cooper,
As the payment is from your employer, the income should be shown in the employment section if it is included in your P60.
You would then claim credit for the Tax in the foreign section under 'Employment, self-employment and other income which you paid foreign tax on'.
If it's not included in your P60, please include it on the box on the employment page for 'Tips and other payments not included on your P60'. ERSM20193 advises that when RSUs payout at the market value on what is called ""dividend equivalents"" in either cash or shares, such payments will generally be taxed as earnings in the year they are received.
ERSM20193 - Employment-related securities and options: what are securities: RSUs and dividend equivalents
Thank you. 

 

Hi, sorry I have ready back my question and need to reword: Remember, I am no longer employed with the company that issued the stock option. No payroll, no P60. The US Broker will pay my net profit directly into my UK bank account. The US Broker will retain 2% and 45% tax. Does the 2% and 45% collected taxes go to my previous employer? How is this then redirected to me? Please explain what you mean by claim credit? Do I need to pay tax on US stocks if I live and work in UK?

Hi Cooper Zirtec,
The tax does not go back to your employer as it is counted as being paid by you for the credit, please refer to:
Relief for foreign tax paid (Self Assessment helpsheet HS263).
Thank you.

You are missing the part about about I am no longer employer by the company that issued the stock. No payroll, No P60. My understanding is the Broker in the USA will take into account standard withholding rate of 47% to cover UK additional rate tax (45%) and NICs (2%). Now this is the important bit I don't understand. Credit is then given in the UK payroll against the actual PAYE and NICs for the amount withheld by the US Broker. But I am no longer on the payroll. Then would follow any balancing / refund due to the UK employee whose marginal rate is less - say 40% and not 45%, which is settled by a further payment by the UK payroll. What do I need to do?

Hi,
If you have no P60, you declare the income still on an employment page but show it as tips. You then claim foreign tax credit relief for the tax paid.
Thank you.