Article Summary
This guidance note provides an overview of the employment-related securities (ERS) rules in the UK tax code. It explains when securities acquired by employees may be taxed under the special ERS provisions rather than as normal earnings. The ERS rules seek to modify the tax position where the normal rules do not adequately reflect the economic value received by the employee or where the government wants a different tax treatment to apply. The note covers key aspects of the ERS rules including the wide definition of securities, when securities are deemed employment-related, restricted securities,
convertible securities, artificially valued securities, acquisitions under market value, disposals over market value, post-acquisition benefits, and securities options. It also outlines the online reporting requirements for ERS acquisitions.Overall, this is a helpful introductory guide for tax professionals to understand the scope of the ERS rules, how they interact with the normal earnings rules, and their purpose in taxing securities awards to employees. It provides useful context on when and why the ERS rules apply.