Late in reporting changes

gtanvir

Hello, 

I get RSU vested quarterly from my company I work for. In May, I got some RSU and it was reported to HMRC by my company in June. 

The amount of RSU I received in May exceeded £6k (less than £16k) and I didn't sell those RSU. There is a restriction on when I can sell those, usually in each three months, there is an open period one month when I can sell those.

Anyway, since May, they are living in the broker account. I got two assessment period passed since I received those. 

My questions are, 

1) Are they considered as capital? They were given as income and fully taxed and reported to HMRC anyway. 

2) If its considered capital, looks like I should have reported about that two months back, which I didn't, which potentially means my last two payments were overpayment.

3) The UC has asked for a review a week ago which I need to do soon. 

I am not sure whether this review is a random one or they suspected something from me. 

It was an oversight on my part as I wasn't sure whether this earned income is treated as 'capital' per UC.

What should I do now? 

Thanks in advance. 

Newcad

I think that @Yamor has looked into this RSU situation earlier this year.

gtanvir

Yes, I raised a similar thread last year and @Yamor had his input. 

This time its to do with delayed reporting of changes.

Spoonie_Turtle

I don't know what the outcome of that thread was, but DWP can't have it both ways.

If classing it as income the first month was correct, then becoming capital would be from the second month, not the first.

(And if it should have been classed as capital from the start then it would have been incorrect to take it into account as income the first month.)

gtanvir

Last time it was a large amount of money, it triggerred Surplus Earning and the UC was closed after seven months. 

NedS

My opinion, if UC are treating it as income in the month it is received, then it becomes capital in the following AP if it remains unspent (standard UC practice)

Do you have access to the capital - i.e, can you sell the shares now or is there a vesting period for which you must hold them? Sometimes, you can sell them immediately, but with penalties such as having to pay the tax on them or forego any free matched shares.

If the capital is unavailable to you due to a vesting period (i.e, you cannot sell the shares yet), then you can argue they should be disregarded as capital until you can sell. Alternatively, if there is a penalty for selling now, only the amount you can receive now should be taken into consideration as capital rather than the full value after any vesting period.

I reserve the right to be wrong if anyone definitively knows otherwise

gtanvir

They are vested and taxed. I do not have full access all the time because of company policy. Theya allow selling the shares every three months for a certain period of time. 

My question is, should I complete the UC review first and then report these capital changes?
Or the other way round?