Existing share options

If you are moving to the UK to work for a brand new employer (not part, for example, of the same group as the non-UK company which granted you your options) and you had no UK duties with your previous employer, then it should be possible for you to exercise your old vested options when you first arrive in the UK without any UK tax implications. First, of course, you will want to consider whether it is commercially sensible to exercise the options and pay the exercise price.

If you did carry out some duties in the UK it should be possible, once you are in command of all the facts, to calculate the potential taxable gain on exercise of the option and apportion that gain as between the income that is chargeable to UK tax and the foreign income that is not chargeable to UK tax.

If you are taxable in the UK on a remittance basis any gain arising on the sale of the option shares will be subject to UK Capital Gains Tax (CGT) if remitted (and detailed analysis will be required to assess whether it is possible to avoid double taxation e.g. tax where the shares are and tax in the UK). Particular care will need to be taken in calculating your allowable base cost in the option shares in assessing the CGT charge.

In conclusion: assess the facts, do the maths, exercise the options before coming to the UK or shortly afterwards and, if you sell the option shares, do not remit the gain to the UK unless you need the proceeds and are willing to pay some UK tax or can claim relief from double taxation.

For more information or advice, please contact Elizabeth Small, Partner, or Heather Corben, Partner, both in our Tax team.

Senior Executives: thinking of relocating to the UK?

Considering the employment offer, negotiating the contract and package

• I’ve been offered a new role in the UK: what are the key terms that I should expect to see and which should I try to negotiate?
• By accepting a new role in the UK, I shall be treated as a “bad leaver” by my current employer and forfeit significant equity and deferred payments: is there anything that I can do?
• Will I be subject to tax on my worldwide income and gains if I become tax resident in the UK?
• I hear that it can be a common practice to have dual employment contracts: one in the UK, and the other abroad. What's this all about?
• I am a private equity executive with carried interest in a fund I manage. Is there a way to improve my tax position in respect of this carry, or is this prevented by the UK’s new tax rules aimed at private equity?

Please do contact any member of our Sen Ex Advisory Group to suggest a question or to find out more about how we can help.

Senior Executives: thinking of relocating to the UK?

We answer common questions raised at key stages of the relocation process.