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HMRC internal manual

Employment Related Securities Manual

The remittance basis for employment-related securities - up to 5 April 2015: general

Paragraph 22 of Schedule 7 of Finance Act 2008 introduces a new Chapter 5A of Part 2 ITEPA 2003 to deal with the effect of the remittance basis on the taxation of employment-related securities.

If an amount counts as employment income under Chapters 2, 3 or 3C to 5 (excluding section 446UA) of Part 7 ITEPA, and the remittance basis applies during any part of the relevant period (see ERSM160700 for guidance on relevant periods), then ITEPA03/S41A will apply.

Subsection (4) provides that, instead of the whole amount which counts as employment income being taxable in the UK on the arising basis, only that part which relates to the UK is so taxable.

It achieves this by use of a formula:

taxable specific income = SI - FSI


SI is the amount of the securities income, and

FSI is the amount of the securities income that is ‘foreign’

The extent to which the securities income is ‘foreign’ is determined under ITEPA03/S41C (see ERSM160800).