Following
the recent consultation process and recommendations of the Office of Tax
Simplification, the Government has
announced that legislation will be introduced to reduce the complexity in
determining the UK tax and social security treatment of share awards for
internationally mobile employees.
The
liability to UK taxation for income realised from share awards will be based on
the proportion of the total income that has accrued during a period when the
employee worked in the UK. It is understood
that the new rules will apply from 6 April 2014 but we are not sure at this
stage whether there will be any transitional provisions so we must await the draft
of the proposed legislation.
This move
will be widely welcomed as the current rules are extremely complex and the NIC
treatment is often different from the tax treatment due to specific social
security rules resulting from the EU Regulations or Social Security Agreements
concluded with certain non-EU States.