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TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 17125
Experience:  International tax
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I have a bonus from PSUs which is a cash payout based on share

Customer Question

I have a bonus from PSUs which is a cash payout based on share price at a fixed point in the year vs. grant date. Is this just taxed as standard income tax or should it be capital gains or treated as a lump sum from the employers or other? Thanks!
Submitted: 3 years ago.
Category: Tax
Expert:  TaxRobin replied 3 years ago.
and thank you me to assist you.
If the award is a stock appreciation right ("SAR") rather than an agreement to issue or transfer stock or shares, i.e. it provides a monetary value equivalent to the increase in value of a specified number of shares over a specified period of time, then the employee is generally going to be subject to income tax and NIcs when the right to benefit under the SAR is enjoyed.
If the SAR is settled in cash, the tax point will normally be on receipt or earlier if the cash is otherwise made available to the employee.
If the SAR is settled by shares, the tax point will normally be on acquisition of the beneficial interest in the shares—normally on vesting.
It would be a lump sum payment to the employee. This would not be capital.