E4.1324 Income outside the general rules—share based earnings
Share awards can form part of a total remuneration package offered by employers that are companies and that have a share based structure, especially where they are in public ownership. Different form of awards may be provided, depending on the employer's objectives and the country in which the plan is established.
The general earnings of an office or employment are taxed under ITEPA 2003, s 15, s 22 and ss 26–27 under the rules described in Division E4.1 (see also E4.1303), but certain income is assessed under its own particular rules which means that specific issues arise for expatriate employees, as described below.
Why do employers offer employees share plans rather than cash?
Where a share plan is used, the aim is often about incentivising the right behaviours and retaining the employee in the longer term. The employee is likely to be motivated to deliver exceptional performance and remain in employment until a large option gain or RSU (Restricted Stock Units) vests.
Employer
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