View our international update below.
Stock options and international employees
UK tax legislation changed from 6 April 2015 and impacted UK-overseas employees who have stock options, restricted shares/stock units and who worked in the UK during some or all of the period between award and vest. The UK rules are now aligned with international practice and subject to certain conditions it is possible to exclude from tax the portion of share income that relates to the period an employee spends working overseas.
New NIC rules were also introduced from 6 April 2015 to bring them in line with this tax position, but employers should review these rules carefully, as there is potentiall for double social security tax, especially where there is a social security agreement between the UK and the other location.
Directors of UK companies that live overseas
A UK director is a UK employee for payroll and expense reporting, even if they live overseas. If the company pays for travel and hotels when the director attends a board meeting in the UK or fulfils similar UK director duties then the UK company should report those expenses on a P11D (or PSA) and the tax should be paid by the director. All directors should be filing a UK return regardless of where they live.
As the director is a UK employee, if the company pay for their travel or accommodation costs then it is treated as regular commuting, as it would be for any other employee who comes to work. It is not a business expense. It is possible in some circumstances to claim relief against travel expenses under a special expat regime (via a personal tax return). The accommodation or hotel expenses however are nearly always taxable. The UK company has an obligation therefore to report the expenses of all UK directors to HMRC.