Treatment of Restricted Stock Units by Payroll Operators

Restricted Stock Units (RSUs) are taxed under the PAYE system. However, in some cases, the RSUs may also be liable to a foreign income tax at the time they vest.

Payroll operators may grant a credit in respect of foreign tax deducted in a country with which there is a double taxation agreement when computing an individual’s income tax liability under the PAYE system.

The Income Tax, Capital Gains Tax and Corporation Tax Manual has been updated. Part 05-05-30 sets out the conditions and requirements in relation to the granting of the credit.