Vested RSU taxation

adesyatnik

Hi all,

I have a question about taxation of vested RSUs in the UK. I have a number of RSU from my former employer (US company operating in the UK) that will vest after I leave the company. How will they be taxed given that that employer no longer acts as my tax agent? What would the difference be if I sell vs if I do not sell them within the same tax year?

Kind regards,

Alex

Yellow_mango

Your employer will still have an obligation to operate PAYE / NIC on the vesting RSIs even if you have left.

Have you asked the company for confirmation on how they will treat this?

Yellow_mango

Also, it sounds like you have not yet left. Have you checked that the RSUs will continue to vest after leaving (ie invested awards do not lapse on cessation of employment)?

adesyatnik

What is this based on/governed by and how would this work in practice given I left the company?

adesyatnik

I’ve already left, but I’m 100% certain the RSUs will vest.

Yellow_mango

What is this based on/governed by and how would this work in practice given I left the company?

This is based on the PAYE regulations.

I (and anyone on here) am of course unable to give specific tax advice. There are many assumptions and details about your and the company’s position which may be relevant here.

The below is very general. Please contact the company and / or obtain personal tax advice if you are unsure on any of this.

In general, it is likely that the company will withhold using 0T / week 1 rates if they do not hold a current PAYE code for you. It is also possible that shares will be withheld / sold at a flat rate (probably based on higher rate tax rates) and then you will be refunded any difference between that and the actual liability once it is processed through the payroll.

They will need to provide you with a statement of the amounts of tax they have paid so that you can include this on your tax return and “true up” the amount paid through payroll and the actual liability based on your actual tax rate for the relevant tax year.

If you hold shares after vesting and realise a gain when you eventually sell these shares, this may be subject to capital gains tax (payable on your tax return).

Your employer will need to confirm the process they and their administrators follow on vesting. Do you still have access to an online portal that might give you information / contact details?