Exclusions from the disguised remuneration rules
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鈥� 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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