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Posted Wed, 20 Dec 2023 11:44:53 GMT by
I have a compensation package that is typical of "Big Tech" companies with about half of my total annual compensation from salary and half from an RSU plan (company shares vesting every year). The self assessment asks us to put the total (pre-tax) compensation number from our P60 form (which, in my case, includes both my base salary and a substantial amount of value from RSUs), and then it calculates the total taxes owed based on that total compensation. However, isn't this a double taxation of the RSU vests? -Tax impact 1: when RSUs vest you already pay a (roughly) 50% tax. In practices this means when 16 shares vest, you "give" 8 of them away to cover the 50% tax burden, and you end up with only 8 in your pocket -Tax impact 2: The value of those (pre-tax) RSUs are also getting taxed as normal income at year end, since the self assessment makes you include it as part of your total income (from the P60) So...half of my total comp is getting taxed 50% (when shares vest) and then ANOTHER 20-40% due to its contribution to my total income. Seems insane. Surely this cannot be correct? Am I doing some thing wrong?
Posted Tue, 02 Jan 2024 10:09:15 GMT by HMRC Admin 2

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.

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