RSU Income type

Hi I have received RSUs from my US employer which have vested in the last taxation year. Through the scheme, a proportion of those RSUs have already been sold to cover my taxation liability. When I complete the Self Assessment, in the Foreign income details section which income type should I use to detail the RSUs that have vested and the sales that have already been made to cover the tax? Thanks

Hi 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'. Thank you

Hi, can I just check please the circumstances here - I am UK tax resident working for the UK sub of a US parent company, and have RSUs in the parent that have vested this year. Again shares were withheld to pay for the tax/NI liability, but the gain and UK tax appears on my P60. Do I need to record anything in the Foreign Income section of my self assessment or is it all fine as normal income from employment? I don’t think in my case the tax is foreign tax it’s UK PAYE? Separately, if I sell any shares giving rise to a capital gain, does that gain need recording in foreign income or just as UK gains? And presumably nothing is required if that gain is under the £12k threshold?

Hi,

It depends on the employer share scheme as to what type of tax they are subject to. You would need to check your paperwork.

Further guidance, however, can be found here:
Tax and Employee Share Schemes

Thank you.

Hi there I also received RSUs from my previous US employer which have vested in the last taxation year. Through the scheme, a proportion of those RSUs have already been sold to cover my taxation liability/withholding tax. Its is a considerable sum, especially as it was taxed at 45% plus NI while I presently have only a minimal income and no NI to pay (though this is income so will likely be lifting to pay NI). I do not have a p60 from the company as I left 2 years ago and the shares only vested this February. My only income is through my company which has been put down in my self assessment as my only employer. Where would I put this income and do I show the tax already paid there or just the income while HMRC will note the withholding tax paid? Do I need to apply an exchange rate? If so which one?

Hi,

Please see guidance here:
ERSM20192

You may need to check with the provider or your paperwork to see what tax is due when vested. This will then depend where they are entered on the return.

As they are foreign shares, you would need to also complete the foreign section of the return to show the tax already paid. HMRC can then look at giving credit for this so that you are not taxed twice on the same income. You can either use the monthly or the yeraly exchange rate for this:
Exchange rates from HMRC in CSV and XML format

Thank you.

Hello - if my shares were vested in 2018 -to 2020 but i sold them only now in 2021 the capital gain i need to declare it in my next Self Assessment tax return correct? If the employer reported the total income tax as part of my P60, do I need to calculate the Capital tax gain? Thank you, MS

Hi,

If the shares were sold in the 20/21 tax year then this is the Self Assessment return that it would need to be reported on.

Gains are reported the year in which they arise.

Only the Income Tax will have been paid through your payroll so this would not include any gain.

You would need to work out the gain yourself, guidance on this can be found here:
Capital Gains Tax

​​​​​​​Thank you.

Hi, Do employers have to report RSUs via payroll during the same month of vesting? Can it be done within a certain number of payroll cycles? Thanks in advance Regards,

Hello, In the above responses from HMRC Admin, they say: 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'. Question 1) Where is the section 'Tips and other payments not included on your P60'? It's not on the SA form. (I think it used to be in the help guide, not that HMRC Admin say this). Question 2) The help guide seems to have changed, and now, there is a SA form for 2020 and a different one for 2021. So could HMRC Admin please update their answer to RD Metcalfe and Sharetime 501? Question 3) I am in a similar position as them, I think. I'm a UK citizen, working for an American corporation. They give employees RSU's (Restricted Stock Unit), but I have to pay US tax at 54% before I get to see these shares (so I only get half of what they give to me). Can I offset this American tax liability or use tax relief (HS261) when completing my self-assessment capital gains tax? If Yes, where do I enter this information? I also read a page on the HMRC website stating that stocks given to employees as a RSU/share plan are not subject to capital gains tax. Is this correct? Thank you for your time and help.

Hi,
 

The tips section of the form can be found under the employment page where it asks for your pay and tax information. The hlpeguidaes are spcific for each year so you  will need to look at the relevant guides for the year in question. As mentioned above, if you have paid tax on the income side of things through payroll then you can claim this back through the foreign section of the return. You would need to check your paperwork for the conditions of the RSU'd to see whether they are subject to capital gains tax or not.  Thank you.

Hi, My situation concerns RSUs but is slightly different to those above: I have some RSUs that vested this year - these are held in a US broker account, but UK income tax and NI was deducted when they vested. They are not included on my P60. I don't believe i owe anything at this point (correct tax and NI was deducted, and i have't sold them yet) but my question is whether this needs to be included in my tax return? And if so, where? Thanks!

Hello, I have a special situation regarding my RSU which I'll be gald to have some help with. I am not a UK citizen and have arrived to the UK about a month ago, I will stay in the UK for about a year with a student dependant visa. I have been working for the past 3 years for my company in my home land and will keep working for them in my time in the UK (but I will work through the UK branch, meaning through local UK company). Now , I was granted RSU about 3 years ago in my country, and while I will work in the UK, some of them will vest, some will also vest after 2 weeks of me working in the UK. My question is, since I have to pay full tax on them in my country, do I have to pay full tax on them as well here in the UK? Is there some consideration that they were granted to me 3 years ago in a different country and that I will literally have some vesting of them 2 weeks after starting to work in the UK (so the taxation of a large amount of RSU would be just for working 2 weeks in the UK)? I cannot find any information abroad regarding this, would love to have some help. Thanks

Hi There, I have RSUs from my company which is listed in US, the stocks are stored and operated in a US trading account. At the point of vesting, the US trading company deducted 42% in the form of shares and only deposited remaining shares to my account. However this shows as `Notional Income` in my payslip, and also is added in my PAYE Income tax in HMRC online record. I understand that this should not be considered as UK income and I will need to pay self assessment form for representing it.. However, I also have child benefit which i claim, since my income excluding the RSU is below 100K, but including it is above 100K. Please advice as to how i correct the Income represented in HMRC website (which adds notional income to actual income and estimates tax on that basis and takes it above 100K), and also clarify if this is not counted towards `Adjusted Income`. Thanks Sau

Hi Ron_koz,

If you are classed as a UK resident then these will need to be declared to us through a Self Assessment tax return if these are not put through the UK payroll.

If tax is deducted from them in the US then you can also look to claim foreign tax credit relief on this:

Relief for foreign tax paid (Self Assessment helpsheet HS263)

You can check your residency status here:

RDR3 Statutory Residence Test

Thank you.

Hi Saurabh Karmarkar,

RSU income would be taxable in the UK if you are UK tax resident, these would be subject to income tax and NIC if paid through a UK payroll.
Otherwise they will need to be reported on a self assessment tax reuturn where you can claim any tax paid as foreign tax credit relief

Relief for foreign tax paid (Self Assessment helpsheet HS263)

Adjusted net income is based on your taxable income as can be seen by guidance here:

Income Tax

and

Personal Allowances: adjusted net income

Thank you.

Hello, I am an Israeli citizen and have been working in a company in Israel for the past 3 years (since 2019), were I was granted some amount of RSU which will vest over 4 years. I have moved to the UK on February 2022 with my wife for her MSc degree, and I am staying in the UK with my Student Dependent visa. I will start working on 01/04/2022 in the UK, and two weeks afterwards (20/04/2022) some of my RSU that were granted to me in Israel will vest (while I work 2 weeks in the UK). As far as I understood, since the change of April 2015, RSUs that were granted overseas will still be taxable in the UK if they vest while I'm a UK citizen (I assume I am considered as one after working 2 weeks full time?). But, I also saw that the amount taxable will be according to the amount of days I have been working in the UK up until the RSU vested. My question is , how is this calculation done ? I got my student dependent visa for the UK since 18/01/2022, but I only moved to the UK on 04/02/2022 and will only start working in the UK from 01/04/2022. From which date will the proportional taxation of the RSU count from, and how will it be calculated ? For example, if the RSU was granted 700 days ago, and I only worked 14 days in the UK when it vested, will they tax only 2% (14 days / 700 days) of the RSU value ? Hope I was clear with my question, Thank you.

Hi,
 

On the basis of the info you have provided, I can confirm that (a) RSUs are indeed taxable in the UK, if they 'vest' during a period of UK residence (b) if the RSU is paid by your employer via your salary, you should declare it in the Employment pages of your Self Assessment tax returm, as part of your salary (c) if any foreign tax has already been deducted from the RSU, you can claim Foreign Tax Credit Relief in the Foreign Pages of your SA return (d) given that you didn't become tax resident in the UK until 4 February 2022, 'split-year treatment' is likely to apply to the 2021/22 tax year, which we will ascertain on the basis of the info you will provide in the Residence pages of tour 2022 Self Assessment tax return.  Thank you.

Hello, I have received RSUs from my company that vested during the 2021-22 tax year. There is no mention of it on my payslip nor my P60. When I receive my vested shares, my company withheld shares using the highest % possible for income tax (47%) but I believe I should have to pay less tax, what is the way to claim it back? Or is it automatically done?

Hi,

If you are classed as a UK resident then these will need to be declared to us through a Self Assessment tax return if these are not put through the UK payroll.

If tax is deducted from them in the US then you can also look to claim foreign tax credit relief on this. As this is foreign tax paid, HMRC are unable to refund this.  
Relief for foreign tax paid (Self Assessment helpsheet HS263)

Thank you.