FTC for RSU vest that was taxed abroad at different market value

Hi, I relocated from Singapore to the UK in 2021. When I left Singapore, I paid an exit tax on unvested RSUs. For sake of easy numbers, I paid 16% on £10,000, i.e. £1,600. Those RSU vested in 22/23. However, the market value of the RSUs on the vesting date was lower than the value was when I was taxed in Singapore, for easy math let's say the value at vest was £8,000. How do I calculate the FTC? Is it 16% on £8,000 (i.e. Singapore tax rate on current market value = £1280), or is the actual amount I paid in taxed when I exited Singapore (=£1,600)? Thank you for your guidance.

Hi RSU_FTC_questions,
RSU's are taxed as income and can attract a foreign tax credit of up to 100% of the foreign tax paid.  
Complete your tax return in full, minus the foreign tax credit.  
View your tax calculation and note how much tax is being charged against the RSU's.  
The FTCR will be the lower of the UK tax payable on the RSU income or the foreign tax paid.
Thank you.

 

Thank you for your response. Just to follow and clarify my question: How do I determine "the foreign tax paid"? In the example above I paid £1,600 in 2021 to Singapore tax authorities, based in the market value of the RSUs in 2021, which was £10,000. The RSUs vested at a lower market value in 2023 at £8,000. Do I calculate the FTC based on the actual amount of taxes I paid to Singapore in 2021, or do I need to calculate the taxes I would have paid, had the value of the RSUs been today's market value? In the later case, I'd take today's market value at £8,000 and apply 16% tax rate to arrive at £1,280 (versus th £1,600 that I actually paid in 2021. Thank you again for your guidance.

Hi RSU_FTC_questions,
Please have a look at the guidance on relief for foreign tax paid, which will help you work out the relief due.
 Relief for foreign tax paid (Self Assessment helpsheet HS263)
Thank you.

Thank you for this. I reviewed the document carefully and cannot find specific guidance as it relates to my case. I would appreciate it greatly if it were possible to get a direct answer to my question, as I would not want to put a wrong number on my return. In the example above, do I use as FTC: 1) the actual value in taxes I paid in Singapore in 2021 (i.e. £1,600), or 2) the theoretical value I would have paid, had the market value of the RSUs in 2021 been what it is today (in which case FTC would be £1,280)? I appreciate your help greatly and look forward to an answer.

Hi,

For an answer to a personal question of this nature, you would need to contact our self assesment team.

Self Assessment: general enquiries

Thank you.

Hi there, thank you for your response. As a general question, when an unvested RSU is taxed overseas, and the those RSUs then vest in the UK at a different market value, how does one determine the FTC? This scenario is not covered in the guidance. Thank you and best wishes, I look forward to your response.

Hi,

You can find guidance here:

Relief for Foreign Tax Paid 2023 (HS263)

Thank you.