Stock Options Granted when living in USA

[varanik]

Hallo,
I am a non UK domiciled holding an Italian passport.

I was given Stock Options by my company in 2000 when working in USA.

Am I liable for UK taxation on those Options?

Thanks
P

[TaxationWeb@BritishA]

If you were granted the options while abroad, and exercised them while in the UK, under domestic UK law they are not taxable. Under the US/UK treaty, they are taxable on a prorata basis.

I'm not positive as to whether the treaty takes precedence over domestic law or not. Under some circumstances it is optional whether to invoke it or not; for me to take the time to check on this particular clause seems a bit pointless for me when someone else on this site will undoubtedly know the answer off the top of their head.

At any rate, you may owe US tax on the shares, depending on your residency status in the US on the date of grant. If you do owe, it's on a prorata basis for the number of days worked in the US divided by the total number of working days between the date of grant and the date of exercise. You would file a 1040NR or 1040, depending on whether you are a greencard holder or not. It's best to seek some advice regarding your US tax liability.