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bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4803
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I am a UK citizen, resident in the UK and earning over £150k/year,

Customer Question

I am a UK citizen, resident in the UK and earning over £150k/year, i.e. an additional rate income tax payer.
I have stock options vesting in the USA. When I exercise the options, the proceeds will be liable in the USA for long-term capital gains tax of 31% (includes federal and state taxes).
I plan to bring the proceeds to the UK, where the top rate of capital gains tax is 20%. Will the proceeds be liable for further capital gains tax in the UK? If so, at what rate? What advice would you give me to minimise the overall tax burden on the proceeds?
Many thanks
Submitted: 2 years ago.
Category: Tax
Customer: replied 2 years ago.
I asked this question without logging in to my account. So my email address was rejected. I'd like the answer sent to me at***@******.***, please. I'm trying to resolve this through my account settings, but it looks as if it's not possible to add a question already asked to my account. Thanks!
Customer: replied 2 years ago.
I see that the answer will appear here, so I'll stay logged in and watch out for it. I also made an error with the UK top rate of capital gains tax, which is 28%. I'm sure you know that! Not trying to catch you out :-)
Expert:  bigduckontax replied 2 years ago.
Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question. The UK has a Double Taxation Treaty with the USA, and indeed with several individual States within the Union as well, which precludes such gains being taxed in both jurisdictions. This is achieved my means of tax credits, the tax paid in one country being allowed as a tax credit against the liability in another. The Treaty does not, however, protect you from differences in rates of tax. The UK CGT rate is 18% or 28% or a combination of the two rates depending on income including the gain in the tax year of disposal. I would point out that in the UK it is usual for such stock options to be sold on vesting so there is no capital gain to tax anyway. I do hope that my reply has been of assistance.