DT1925 - Non-residents: UK income: share option gains, phantom share option gains and bonuses
The words `salaries, wages and other similar remuneration’ in Articles of agreements dealing with employment income should be regarded as including -
- share option gains chargeable under ICTA88/S135;
- bonus payments such as those arising under phantom share option schemes and;
- share option gains chargeable under capital gains legislation.
Share option gains should usually be regarded as accruing evenly between the grant and exercise dates. If, subsequent to the date when the option was granted, the employee ceases to be a resident of the United Kingdom and becomes a resident of a state with whom the United Kingdom has a double taxation agreement, he may claim that part of the gain is exempt under the Article of that agreement dealing with employment income.
Tax bulletin 55 publicised the Revenue’s approach in the most common circumstances. These are itemised in the following instructions DT1925A and 1925B. If a claim is received that is not on all fours with these, or when otherwise indicated, it should be referred to International Division, External Relations Group (Advisory).