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HMRC internal manual

Employment Related Securities Manual

International from 6 April 2015: ascertaining chargeable and unchargeable foreign securities income - from 6 April 2015: examples: example 3 - s26A employee with overseas duties

In 2015/16 Tom is resident but not domiciled in the UK, and meets the requirement of ITEPA03/S26A. Whilst resident in the UK, he works entirely overseas for an Italian employer. On 1 July 2015 he is awarded a share option which he exercises on the day that it vests, 31 March 2016, realising a gain. He claims the remittance basis of taxation under ITA07/S809B for the year.

All the conditions in ITEPA03/S41H(7) are met for 2015/16.

The relevant period for the share option (01/07/15 to 31/03/16) falls wholly within 2015/16.

As the duties of the Italian employment are performed wholly outside the UK, the whole of the share option gain is treated as chargeable foreign securities income and will be taxed only if remitted to the UK.

For an explanation of the requirement of section 26A, see ERSM162677.