RSU Income type

Hi - my US RSU's recently vested and tax was withheld. The total amount appears on my payslip with the tax and NI deducted. It appears though that the tax has been calculated at 47% where I am on 40% tax rate. How do I go about claiming the difference back?

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'.  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.

I will receive income this tax year from both vesting RSUs and exercisable (non tax advantaged) stock options with tax and NI deducted at 47% through UK payroll of my former employer (I have previously received my P45 and have no other income source this year). Is this income classed as relevant for purpose of paying into my Sipp and claiming tax relief up to the £60k annual allowance or am I subject to the £2880/£3600 limit and need to claim back what will amount to overpaid tax another way?

Hi,

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. You can see guidance here:

ERSM20193 - Employment-related securities and options: what are securities: RSUs and dividend equivalents

The pension tax manual guidance on what contributions to a pension scheme, qualify for relief, advises employment income, such as: pay, wages, bonus, overtime, or commission, but only if taxable under Section 7(2) Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003). You can see information here: 

Earnings that attract tax relief

Thank you.