½Û×ÓÊÓÆµ

Employment-related securities ― PAYE

Produced by Tolley in association with
Employment Tax
Guidance

Employment-related securities ― PAYE

Produced by Tolley in association with
Employment Tax
Guidance
imgtext

Introduction

Awards of securities, exercise (or vesting) of securities options and certain other events relating to employment related securities (ERS) may be liable to income tax as earnings under ITEPA 2003 s 62, or the special ERS rules under ITEPA 2003 ss 417 – 554 (Part 7).

The tax charges may be personal tax charges for the employee via self-assessment, or employers may be obliged to withhold income tax and NIC under PAYE.

This note aims to set out which ERS related tax charges, and in what circumstances, employers must operate PAYE and NIC, and the practical implications of doing so.

Share awards

An outright award of ERS represents ‘money’s worth’ and is taxable under ITEPA 2003, s 62. The taxable amount is the market value of the securities less any payment made by the employee. Market value is de-fined at TCGA 1992 ss 272 - 273

The ‘money’s worth’ taxable amount may be a personal tax liability of the employee, payable via their self-assessment tax return, or there may

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+â„¢
Helen Wood
Helen Wood

Founder, HLN WD TX , Employment Tax


Helen Wood is the founder of HLN WD TX, a share schemes and employee incentives advisory business.She qualified as a CA with ICAS in 2009 and has worked as a specialist reward and incentives advisor for 17 years, spending 13 of those at KPMG followed by 3 ½ years as an Associate Director at RSM. Helen has worked with businesses ranging from start-ups to fully listed companies, spanning owner-managed businesses, private equity portfolio companies, and AIM listed businesses.She advises on a wide range of employee share schemes and employment related securities matters including the design and implementation of effective management and employee incentives; tax valuation of employment related securities, buy and sell side transaction support, HMRC compliance, tax due diligence and employee ownership trust transactions.

Powered by

Popular Articles

Tax on UK resident beneficiaries of non-resident trusts ― overview

Tax on UK resident beneficiaries of non-resident trusts ― overviewIntroductionUK resident beneficiaries of non-resident trusts are subject to UK tax on payments or benefits received from the trust. They are liable for income tax on income distributions from the trust and they may also be liable to

14 Jul 2020 13:47 | Produced by Tolley Read more Read more

Double tax relief

Double tax reliefWhen income arises in a foreign country to a UK resident company and that income is taxable in that foreign country, the UK may give the company relief for the foreign tax by crediting the foreign tax against the UK tax charged on that income. This might include withholding tax on

14 Jul 2020 11:31 | Produced by Tolley Read more Read more

Holdover relief for disposals by trustees

Holdover relief for disposals by trusteesOverviewWhere a capital gain has been realised on an asset that has been disposed of and that disposal was not for full value (that is not in an arm’s length sale) then holdover relief may be available. This will happen when trustees appoint capital assets

14 Jul 2020 11:54 | Produced by Tolley Read more Read more