Following the recent consultation process and recommendations of the Office of Tax Simplification, the Government  has announced that legislation will be introduced to reduce the complexity in determining the UK tax and social security treatment of share awards for internationally mobile employees.

The liability to UK taxation for income realised from share awards will be based on the proportion of the total income that has accrued during a period when the employee worked in the UK.  It is understood that the new rules will apply from 6 April 2014 but we are not sure at this stage whether there will be any transitional provisions so we must await the draft of the proposed legislation.

This move will be widely welcomed as the current rules are extremely complex and the NIC treatment is often different from the tax treatment due to specific social security rules resulting from the EU Regulations or Social Security Agreements concluded with certain non-EU States.