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Posted Fri, 12 Apr 2024 13:26:19 GMT by TaxBeast
While living and working in USA in 2021 as part of an annual performance bonus my employer granted me restricted company stock in a US brokerage account. The stock would not be available to sell until 3 years later. From the grant date the value of my stock fluctuated and accrued dividends (which automatically reinvested). The stock was "distributed" (i.e. was unlocked in the brokerage account for me to sell) in 2024, when I was back working and living in the UK. The US brokerage account has already withheld a portion of the shares to cover federal tax withholding. My working assumption is that the value of this stock forms part of my remuneration for work performed while living and working in USA, and therefore that is is taxable in USA rather than UK. Sound about right? I've read through HS305 and now I'm more confused than when I started.
Posted Mon, 22 Apr 2024 11:44:07 GMT by HMRC Admin 5

A right to acquire the cash equivalent of securities under such an arrangement is not a security (nor a securities option). It is a type of phantom share plan. See ERSM20196. 
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.  
Please see ERSM20193 - Employment-related securities and options: what are securities: RSUs and dividend equivalents

Thank you

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