Exclusions from the disguised remuneration rules

Produced by Tolley in association with

Employment Tax

Guidance

STOP PRESS: The remittance basis is abolished from 6 April 2025, although this only applies to foreign income and gains arising on or after that date. The remittance basis rules still apply to unremitted income and gains arising before that date but remitted later. The legislation is included in FA 2025. For more details, see the Abolition of the remittance basis from 2025/26 guidance note.

This note covers the main exclusions available against the application of the disguised remuneration legislation.

Exclusions for share schemes

There are specific exemptions in the legislation for arrangements that support common types of employees’ share schemes. It is important to ensure that each step in the process is covered by a separate exclusion, as HMRC will treat the setting aside of assets (earmarking), and the grant of options or awards as distinct steps for the purposes of the rules. The statutory exemptions overlap, and in some cases are subject to certain terms and conditions.

Tax-advantaged share schemes

Tax-advantaged schemes benefit from the widest set of

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Anton Lane

Managing Partner, Edge Tax LLP , Corporate Tax, OMB, Employment Tax, International Tax, Personal Tax, IHT Trusts and Estates

I started my career helping to sort out tax problems for high net worth individuals, corporations and high profile clients under investigation for suspected serious fraud at Ernst & Young. I specialised in anti avoidance legislation targeting offshore structures and held senior positions with large offshore fiduciary service providers. I established the Edge brand over a decade ago and in 2012 focused the main business on managing tax risks, handling suspected serious fraud cases and assisting clients and advisers with disclosures to HMRC.

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