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Non - Dom

As an employee of a foreign subsidiary working in the UK had options to buy shares(unapproved scheme) in the holding company which is resident in India. The employee is an Indian Domicile working in the UK for the subsidiary company for the last 5 years.

The holding company in India has been taken over and as such the employee has made a gain on these shares options and the sale proceeds have not been remitted to the UK. His employers in the UK, the subsidiary company has deducted tax on the sale procceds of the shares.

Is the employee entitle to any tax exemption from tax, due to Non Dom. And if anybody knows what are the tax implications here.   


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02nd Apr 2012 14:31

I'm not sure Non Dom status is relevant

from what you have said.

It sounds like the employee was granted an unauthorised share option by virtue of his UK employment.  The difference between the option price and the exercise price will therefore be liable to tax (and possibly) NIC's because they relate to his UK employment.  If the shares were exercised and sold immediately as part of the take over, then the Exercise Price will be the same as the sale price and no Capital Gain arises. So it sounds like the employer has correctly deducted tax under PAYE as they are obliged to.

So I'm not sure that being a Non Dom has any relevance to the proceeds of the exercise of the option. 

There may well be planning opportunities arising depending on your clients Residence and Non Dom status going forward though.

I hope this helps.

Thanks (1)
02nd Apr 2012 16:36

Non - Dom

I would like to thank you for your detailed reply which I have found very helpful.



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