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Ask Barbara Your Own Question
Barbara
Barbara, Enrolled Agent
Category: UK Tax
Satisfied Customers: 3011
Experience:  18+ years of experience in tax preparation; 25+ years of experience as a real estate/corporate paralegal.
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Sorry Pearl I dont have a Social Security question. I

Customer Question

Sorry Pearl I dont have a Social Security question. I thought i had come on to a Tax site.?
JA: What confuses you?
Customer: Forgive me but the page i am on is entitled Tax implications of Stock options and you ask about Social Security. Can you help with a Tax question related to stock options?
JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?
Customer: Ok i have NQSO options with my American employee company and we are being bought.
Submitted: 1 month ago.
Category: UK Tax
Customer: replied 1 month ago.
I want to know if i exercise my options will i be liable for UK income tax?
Expert:  Barbara replied 1 month ago.

Welcome to Just Answer. My name is ***** ***** I will be happy to assist you.

There will be an income tax charge at the date of exercise on the market value of the option shares at the date of exercise, less the option price (i.e. the purchase price plus the cost of grant to the employee, if any).

The US and UK have taken steps to avoid double taxation on gains related to stock option plans. Under a treaty signed by the US and UK, if the grant, exercise or sale is taxable, it is generally taxable in the employee’s country of residence. However, the gains may be taxable in the other country if services in connection with the employment were performed there. This treaty assumes that employees will be able to take advantage of foreign tax credits in their country of residence as well.

The following link contains excellent information you will find helpful:

https://www.lw.com/upload/pubContent/_pdf/pub1254_1.pdf

Please let me know if I can assist you further.

Thank you and best regards,

Barb