Internationally mobile employees with employment-related securities
Produced in partnership with Baker McKenzie LLP
Internationally mobile employees with employment-related securities

The following Share Incentives guidance note Produced in partnership with Baker McKenzie LLP provides comprehensive and up to date legal information covering:

  • Internationally mobile employees with employment-related securities
  • Introduction
  • Treatment since 6 April 2015
  • Income tax liabilities
  • Application to particular types of share awards
  • National insurance liabilities
  • Extent of alignment between the income tax and NICs calculations
  • Examples
  • Corporate Tax Deduction

Introduction

This Practice Note discusses the taxation of internationally mobile employees and directors in relation to employment-related securities (ERS) charged to tax within Part 7 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA 2003). The scope of the charge to income tax is important not only for the individuals themselves (in determining their income tax liabilities) but also for employing companies in determining the associated PAYE and National Insurance (NICs) liabilities.

This Practice Note considers only the UK income tax and NICs position. There may also be tax implications in other jurisdictions with which the individual or employing company is connected. These non-UK tax considerations are outside the scope of this Practice Note and local law advice should be taken.

Internationally mobile employees and directors are those individuals who work in different jurisdictions around the world (whether concurrently or consecutively). They include:

  1. UK residents going overseas to work

  2. overseas residents coming to the UK to work, and

  3. UK and overseas residents who move in and out of the UK

This note considers the jurisdictional scope of the UK income tax charges on ERS.

For details of the PAYE and NICs implications for the employing company, see Practice Notes: PAYE—readily convertible assets, intermediaries and jurisdictional scope—Jurisdictional scope and NICs implications of employment-related securities and securities options.

There are also registration and reporting obligations