Valuation for options and restricted stock units

Hello. Could you help me with some questions, please? About 'ERSM220060 - Valuation Issues' https://www.gov.uk/hmrc-internal-manuals/employment-related-securities/ersm220060 1. That page talks about options and exercise. Is what described on that page also applicable to restricted stock units and acquisition of restricted stock units via their distribution, in particular that (in the same or/and similar circumstances as for options) the market value may be accepted as equal to the sale price on 'Day One' or 'Day Two'? 2. That page says: 'Sales extend into following dayNormally with a cashless exercise the exercise and sale will take place on the same day. There may be circumstances where, with an exercise late on Day One and large number of securities placed with the broker, that the sales extend into Day Two. HMRC will accept the cashless exercise treatment whereby the actual sale price is used in these circumstances.' If a Sell-to-cover (cashless) arrangement had been made, but the sale happened only on Day Two, and the reason for that was not necessarily (partially or only) that 'large number of securities [was] placed with the broker', can the actual sale price from Day Two still be used? (The company's shares were listed on a US stock exchange.) 3. Is ERSM220060 applicable for the tax year 2022-2023? Thanks.

Hi StockOptions821485,

RSU's are long term investment plans and there is guidance at ERSM20192
ERSM20192 - Employment-related securities and options: what are securities: Long Term Incentive Plan (LTIP).
When shares vest there is tax and NIC deducted and when selling the shares
YES - ERSM220060 applicable for the tax year 2022-2023  ERSM220060 - Valuation Issues).

Thank you.

Hello. Thanks. Could you help me with my original questions (1) and (2), please?

Hi StockOptions821485,

Q1  was answered and you were referred to ERSM20192 with the appropriate link.  
Q2  yes

​​​​​​​Thank you.

Thank you very much. I am sorry, regarding question (1), could you help me, please: Is what described in ERSM220060 also applicable to restricted stock units and an acquisition of shares via a distribution of the restricted stock units, in particular that the market value may be accepted (at least, under certain condition(s)) as equal to the sale price on 'Day One' or 'Day Two' for a Sell-to-cover (cashless) arrangement? In other words, in ERSM220060, does the meaning of an 'option' include restricted stock unit(s), and does the meaning of the exercise there include the acquisition of shares via a distribution of restricted stock units? My understanding from ERSM20192 / ERSM110010 / ERSM110015 is that, potentially, that is correct. I would like to check whether that is actually correct. (I am sorry, in the original version of question (1) I wrote '[...] and acquisition of restricted stock units via their distribution, [...]', but I should have written '[...] and acquisition of shares via a distribution of restricted stock units, [...]'.)

Hi,

Restricted stock units may come within the meaning of an 'option' included in ERSM220060 however this will be determined by the facts of the individual case. As this forum only provides general advice, please contact us directly if you require a more definitive answer.

Thank you.