American Stock Options
United Kingdom tax relief on stock option gains can be obtained by creating an approved H M Revenue & Customs arrangement ("Sub-Plan") that will attach UK tax-favoured status to options granted by a US company to either its employees or employees of its UK subsidiary.
Tax relief is available in respect of options with an aggregate fair market value of £30,000 determined at the date of grant of the option. The gains attached to options granted outside the approved arrangements are subject to UK income tax and (in appropriate cases) National Insurance Contributions ("NICs") where appropriate. However, employers NICs can be transferred to the optionee by a joint election or an agreement with the optionee. The optionee will normally receive tax relief for any employers NICs paid.
(i) on or after the third, and not later than the tenth, anniversary of the date of grant of the option; or (ii) where the rules permit, before the third anniversary of the date of grant and within 6 months after cessation of the optionees employment with the group by reason of injury, disability, redundancy or retirement.
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This briefing has been prepared for general guidance only and should not be acted upon without specific advice. Please contact us if you need further information.
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