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HMRC internal manual

Employment Related Securities Manual

Employment-related securities and options: exclusions: residence (up to 5 April 2015)

From 6 April 2015 the residence exclusions in Part 7 of ITEPA03 have been removed. See ERSM160000 and in particular ERSM162000.

Therefore the rest of this page relates to the period up to 5 April 2015.

Chapters 2, 3 and 4

For employment-related securities acquired after 5 April 2008, the following chapters only apply if, when the securities are acquired, the employee is resident in the UK:

  • Chapter 2 restricted securities
  • Chapter 3 convertible securities
  • Chapter 4 post-acquisition benefits from securities

(see ITEPA03/S421E (1)).

Chapter 5

For employment-related securities options acquired after 5 April 2008 Chapter 5 (securities options) only applies if, when the option is acquired, the employee is resident in the UK. See ITEPA03/S474 (1).

Chapters 3A, 3B, 3C and 3D

The following chapters only apply to employment-related securities if, when they are acquired, the employee’s earnings from the employment were (or would have been if there had been any) general earnings to which any of the charging provisions of Chapter 4 or 5 of Part 2 ITEPA 2003 apply:

  • Chapter 3A securities with artificially depressed market value
  • Chapter 3B securities with artificially enhanced market value
  • Chapter 3C securities acquired for less than market value
  • Chapter 3D securities disposed of for more than market value

See ITEPA03/S421E (2).

For guidance on the residence rules applying to employment-related securities and employment-related securities options in a “split year”, see ERSM20310

If the relevant employment has ceased, or not yet begun, see ERSM20360.

The residence rules applying to securities and securities options acquired before 6 April 2008 are set out at ERSM160200

For guidance on international aspects of the employment-related securities rules, see ERSM160000.