Share Options and RSUs When You Move Abroad: The Apportionment Nobody Warns You About

For anyone leaving a UK job with unvested equity, this is usually the largest single number in the whole departure, and the one least likely to have been thought about. Share options, restricted stock units and similar awards are treated as employment income, and the UK's rules for internationally mobile employees apportion that income between countries by reference to where the duties were performed over the relevant period — broadly from grant to vest.

The consequence is that the UK keeps a claim on the portion of an award attributable to UK service even though it vests years after you left, and your new country has a claim on the portion attributable to service there. Neither claim disappears because a payroll stopped.

The Core Mechanic

Take an RSU granted while you worked in London, vesting in equal tranches over four years, with a move abroad after eighteen months. Broadly, the proportion of the vesting period spent working in the UK is UK-taxable employment income when the award vests; the balance is attributable to your overseas service. The split is done by workdays, not by calendar residence, and not by where the shares are held or the plan is administered.

Withholding When You Are No Longer on the Payroll

Where an award vests after departure, the former employer often still has a UK withholding obligation on the UK-attributable portion. That produces two awkward practical problems. The first is mechanical: there is no salary to deduct from, so the employer typically sells shares to cover the tax or asks you to fund it. The second is timing: employees frequently receive a demand months after leaving, for tax on shares they may not have sold.

Where the split of duties is known in advance, a section 690 direction can align the withholding with the true UK proportion instead of over-collecting and refunding later.

Two Charges, Two Countries, One Set of Shares

The UK-attributable slice is UK employment income. The overseas slice is generally taxable where you worked. Relief for double taxation is claimed through the treaty, and in this direction it is usually your new country that grants credit — see claiming credit in your new country. Getting both sides to agree on the same apportionment, in the same currency, over the same period, is the actual work.

Then the Shares Themselves

Once an award has vested and been taxed as income, the shares are simply shares. A later sale is a capital disposal, taxed under capital gains rules with a base cost equal to the value already taxed as income. For a non-resident, gains on ordinary shares are generally outside UK capital gains tax — but the temporary non-residence rule can pull gains back into charge for someone who returns within the statutory period, as our CGT on leaving guide explains.

What to Do Before You Resign

1. Get the full grant schedule — grant dates, vest dates, plan type — in writing, before you are an ex-employee and harder to help.
2. Ask what happens to unvested awards on leaving. Many lapse entirely, which changes the analysis to nothing.
3. Model the vest dates against your move date. A tranche vesting a month before or a month after departure can be taxed very differently.
4. Start the workday log now, because the apportionment depends on it — see proving non-residence.
5. Check the destination's treatment before signing anything. Some countries tax equity at grant, some at vest, some on a different measure entirely.

Why This Deserves Professional Help

Equity apportionment for mobile employees is one of the few areas where the interaction of two tax systems genuinely cannot be reasoned out from first principles. The sums are large, the withholding lands on someone else's timetable, and errors surface a year later when the shares have moved. If you are leaving with meaningful unvested equity, this is the item on the list to pay for advice on — see choosing an expat tax adviser.

Frequently Asked Questions

Do I still pay UK tax on shares that vest after I leave the UK?

Generally yes, on the portion attributable to your UK service during the vesting period. The charge follows where the duties were performed, not where you live on the vest date.

How is the split between countries calculated?

Broadly by reference to workdays over the relevant period, usually grant to vest. That makes a dated record of where each working day was spent the key document in the whole exercise.

Will my former employer withhold UK tax on a post-departure vest?

Often, yes, on the UK-attributable part. With no salary to deduct from, employers typically sell shares to cover it or invoice you, sometimes months after you have left.

Does leaving the UK break a tax-advantaged share plan?

It can. UK tax-advantaged plans attach conditions, commonly about continued employment, and breaching them converts favourable treatment into ordinary income tax. Read the plan rules before resigning.

What happens when I eventually sell the shares?

That is a capital disposal with a base cost equal to the amount already taxed as income. Non-residents are generally outside UK CGT on ordinary shares, subject to the temporary non-residence rule if you return.

Related Guides

Keep reading with these related guides and calculators:

• Bonuses paid after you leave — the same principle, simpler facts
• Section 690 directions — aligning withholding with reality
• CGT when you leave — what happens on the eventual sale
• Credit in your new country — relieving the double charge
• Proving non-residence — the workday log this depends on
• Choosing an adviser — the item worth paying for