Under current UK tax rules, equity compensation income realized by inbound and outbound internationally mobile employees is subject to taxation in the UK depending on residency status, which can lead to over-withholding (and the need to claim a tax credit on the employee's personal annual return), double taxation (if the new host country does not have a tax treaty with the UK), or the payment of no UK income tax (if the award was granted before transferring to the UK). 

Under new rules effective April 6, 2015, for all taxable events occurring on or after that date (regardless of when or where the award was granted), equity compensation income realized by inbound and outbound internationally mobile employees will be prorated based upon the number of days worked in the United Kingdom or another country during the period over which the income is earned (generally, the vesting period for most equity awards).

In light of these new rules, companies should review their tax withholding and reporting procedures for equity income earned by internationally mobile employees who have transferred into or out of the United Kingdom to ensure that these new proration rules are properly applied.  Please contact your GES attorney for more information.