RSUs & Share Options After Leaving the UK: Tax Guide

Key points

The UK taxes the share of each award that relates to your UK-resident time between grant and vesting.

✓ Each tranche of a graded award has its own relevant period.

✓ For options, the UK percentage is fixed at vesting but applied to the gain when you exercise.

✓ Your base cost is the value taxed as income at vesting or exercise. Only later growth is a capital gain.

✓ Selling the shares while non-resident is generally outside UK capital gains tax.

✓ Return within about five years and shares you held when you left can come back into UK tax.

You are leaving the UK with RSUs or share options that have not vested yet. A common assumption is that once you are non-UK resident, HMRC loses interest in anything that vests later. It does not. The UK taxes the part of the award that was earned while you were UK resident, even if the shares vest, or the option is exercised, after you have gone.

This guide covers two things only: how HMRC sources RSU and option income between grant and vest, and how the shares are taxed when you sell them.

The key question is simple. Over what period was the award earned, and how much of that period were you UK resident?

RSUs and share options: how they are taxed in the UK

What is the basic UK treatment? Both types of award create two separate tax points:

➜ Restricted stock units (RSUs): income tax on the market value of the shares when they vest and are delivered to you. For UK purposes, RSUs are usually treated as share options, because they are a right to receive shares in the future.

➜ Share options: income tax on the gain when you exercise, being the market value of the shares minus the price you pay for them.

➜ When you sell: any growth after vesting or exercise is a capital gain, taxed separately from the income.

The income part is where leaving the UK makes a difference, because it is sourced back to the period in which the award was earned.

👉 HMRC guidance: Tax and Employee Share Schemes

Sourcing from grant to vest: the relevant period

Since 6 April 2015, specific rules for internationally mobile employees apply. They treat the income as building up evenly over a "relevant period", which for RSUs and options runs from grant to vesting, or to exercise if that comes first.

The UK-taxable part is then broadly:

Taxable income = total income × (UK-taxable days in the relevant period ÷ total days in the relevant period)

➜ Days while you were UK resident count in full.

➜ Days after you became non-resident, including the overseas part of a split year, only count to the extent you worked in the UK on them.

👉 HMRC manual: internationally mobile employees and employment-related securities (ERSM160100)

👉 The law: Income Tax (Earnings and Pensions) Act 2003, section 41G (the relevant period)

Example: RSUs vesting after you leave

What does this look like in numbers? Take a straightforward three-year cliff vest.

Image 1: sourcing the income from grant to vest

➜ Alex is granted RSUs on 6 April 2024, vesting in full on 5 April 2027.

➜ Alex is UK resident until 5 April 2026, then becomes non-resident from 6 April 2026, with no UK workdays afterwards.

➜ The relevant period is 1,095 days, of which 730 were UK resident.

➜ The shares are worth £90,000 when they vest.

£60,000 is taxable in the UK as employment income in 2026/27, even though Alex is non-resident that year. The remaining £30,000 is outside UK income tax.

What if Alex comes back to the UK for work?

UK workdays after leaving add to the UK share. Say Alex works 20 days in the UK out of 230 working days in 2026/27. The £30,000 attributable to that year is typically split on a workday basis, so around £2,609 more becomes UK-taxable. Keep a workday diary, because this is exactly what HMRC will ask for.

Share options: the fraction is fixed at vesting, the gain is not

Does it matter when you exercise an option? For the fraction, no. The relevant period stops at vesting, so the UK percentage is locked in on that date. But the percentage is applied to the gain when you exercise.

If your option vests when you have been non-resident for a year and you exercise five years later, the UK still taxes its fraction of the full exercise gain. Any rise in the share price between vesting and exercise sits inside that charge. For options with long exercise windows, that can make the UK bill much larger than people expect.

Graded vesting: each tranche is separate

Each tranche has its own relevant period, from grant to that tranche's vesting date. With three annual tranches and a departure at the end of year two:

➜ Tranche 1 vests after year one, while you are UK resident: 100% UK-taxable.

➜ Tranche 2 vests on your last day of UK residence: 100% UK-taxable.

➜ Tranche 3 vests a year after you have left: two-thirds UK-taxable.

This is why you cannot take one blended percentage across a whole award. Your vesting schedule matters as much as your travel dates.

When grant to vest does not fit

Sometimes the grant-to-vest period does not reflect when the award was really earned. For example, an award might be granted for performance in the year before grant. The legislation includes a "just and reasonable" override so a different period can be used. It works both ways, and HMRC can use it too, so any departure from the default needs evidence behind it.

👉 HMRC manual: the just and reasonable override (ERSM162710)

👉 The law: Income Tax (Earnings and Pensions) Act 2003, section 41L (just and reasonable apportionment)

Tax when you sell the shares

Once RSUs have vested or an option has been exercised, you own ordinary shares. Any growth from then on is a capital gain, not employment income.

Image 2: income tax up to vest, capital gains tax after it

Your base cost is the market value of the shares when they vested or when you exercised, which is the amount taxed as income plus anything you paid. That is why selling immediately at vest, including the "sell to cover" shares your employer sells to pay the tax, usually produces little or no gain.

If you are UK resident when you sell

➜ Capital gains tax applies at 18% or 24%, depending on your income, after the £3,000 annual exempt amount.

➜ Shares in the same company are matched in a set order: shares bought the same day, then within the next 30 days, then your pooled holding at average cost. Multiple vests can mean a blended base cost.

➜ In the year you leave, if split-year treatment applies, gains on sales made in the overseas part of the year are generally outside UK capital gains tax.

👉 HMRC guidance: Tax when you sell shares

If you are non-resident when you sell

Most non-residents are not liable to UK capital gains tax on shares. In the Alex example, if the shares worth £90,000 at vest are sold for £110,000 while Alex is non-resident, the £20,000 gain is outside UK capital gains tax.

The main exception is the five-year rule. If you sell shares you already held when you left, and you return to the UK within about five years, the gain can be taxed in the year you come back. See our guide to the 📖 temporary non-residence rules.

Checklist before you leave

1. Get your grant documents and vesting schedule for every RSU and option award, tranche by tranche.

2. Pin down your residence position for the year you leave, including whether split-year treatment applies. See 📖 split-year treatment.

3. Work out the UK fraction for each tranche using your departure date and grant-to-vest periods.

4. Keep a workday diary for any UK work after you leave.

5. Record the market value at every vest and exercise. It is your base cost when you sell.

6. Think about when you sell, particularly shares you already hold and a possible return within five years.

Cash bonuses follow a similar "when was it earned" logic. See the bonus examples in 📖 working remotely abroad for a UK company.

Frequently asked questions

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

Usually yes, on part of them. HMRC taxes the proportion of the value relating to the time between grant and vesting when you were UK resident or working in the UK. The rest is outside UK income tax.

What is the relevant period for RSUs and share options?

It is normally the period from grant to vesting, or to exercise if that comes first. Where an award vests in tranches, each tranche has its own relevant period.

Does it matter when I exercise my option after leaving the UK?

The UK percentage is fixed at vesting, but it is applied to the gain on the date you exercise. Exercising later means the UK taxes its share of any extra growth between vesting and exercise.

What is my base cost when I sell RSU shares?

Your base cost is the market value of the shares when they vested, which is the amount taxed as income. For options, it is the market value at exercise. Only growth after that point is a capital gain.

Do I pay UK capital gains tax on RSU shares if I sell after leaving the UK?

Generally not, if you are non-UK resident when you sell. The main exception is shares you held when you left, if you return to the UK within about five years.

Last reviewed on 22 October 2026 by Emma McDermott, ATT, founder of Global Tax Consulting, in line with the law in force at that date: Income Tax (Earnings and Pensions) Act 2003, section 41F, and the HMRC guidance cited above.