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Official guidance

Employment Related Securities Manual

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ERSM01000 · Data Protection
ERSM10000 · Introduction
ERSM20000 · Employment-related securities and options
ERSM30000 · Restricted securities
ERSM40000 · Convertible securities
ERSM50000 · Securities with Artificially Depressed Value
ERSM60000 · Securities with artificially enhanced value
ERSM70000 · Securities acquired for less than market value
ERSM80000 · Disposals for more than Market Value
ERSM90000 · Post acquisition benefits from securities
ERSM100000 · University spin-outs
ERSM110000 · Securities options
ERSM140000 · Reporting requirements - 'Other' template (Previously Form 42)
ERSM160000 · International
ERSM162000 · International from 6 April 2015
ERSM170000 · PAYE and NICs
ERSM180000 · CGT Interface
ERSM190000 · Employer Interface
ERSM200000 · Public Offers
ERSM210000 · Disclosures
ERSM220000 · Valuation Issues
ERSM300000 · Tax-advantaged schemes
ERSM600000 · Feedback
163200 · International from 6 April 2015: reporting requirements - from 6 April 2015
ERSM100020 · University Spin-outs
ERSM100040 · University Spin-outs
ERSM100150 · University Spin-outs
ERSM100170 · University Spin-outs
ERSM100190 · University Spin-outs
ERSM10030 · Introduction
ERSM100310 · University Spin-outs
ERSM100330 · University Spin-outs
ERSM100410 · University Spin-outs
ERSM100430 · University Spin-outs
ERSM100520 · University Spin-outs
ERSM110025 · Securities Options: what are securities options - cash alternatives
ERSM110030 · Securities Options: Dividend Equivalents
ERSM110060 · Securities Options: application of Chapter 5 (amended by Schedule 22) to options
ERSM110540 · Securities Options: non-deductible amounts
ERSM110560 · Securities Options: exercise of EMI options
ERSM110850 · Securities Options: Capital Gains Tax on sale of securities acquired
ERSM110930 · Securities Options: earn-outs: restricted securities
ERSM111000 · Securities Options: rights issues
ERSM140020 · Reporting requirements - 'Other' template for non-tax advantaged employment-related securities (Previously Form 42)
ERSM140060 · Reporting Requirements - Form 42
ERSM140100 · Reporting requirements - Form 42
ERSM160200 · International: impact of residence and domicile status on employment-related securities & options - up to 5 April 2015
ERSM160400 · International: commencement of the new rules - up to 5 April 2015
ERSM160600 · The remittance basis for employment-related securities - up to 5 April 2014
ERSM160615 · The remittance basis for employment-related securities - up to 5 April 2015: changes from 6 April 2013
ERSM160700 · The relevant period - up to 5 April 2015
ERSM160720 · The relevant period - up to 5 April 2015: restricted or convertible securities
ERSM160735 · The relevant period - up to 5 April 2015: securities acquired for less than market value
ERSM160745 · The relevant period - up to 5 April 2015: securities acquired for less than market value other than pursuant to securities option
ERSM160755 · The relevant period - up to 5 April 2015: post-acquisition benefits from securities
ERSM160800 · Ascertaining Foreign Securities Income (FSI) - up to 5 April 2015
ERSM160815 · Ascertaining Foreign Securities Income (FSI) - up to 5 April 2015: daily accrual
ERSM160825 · Ascertaining Foreign Securities Income (FSI) - up to 5 April 2015: non-domiciled/not s26A employees - conditions to be met
ERSM160835 · Ascertaining Foreign Securities Income (FSI) - up to 5 April 2015: non-domiciled/not s26A employees with associated employments - detail
ERSM160845 · Ascertaining Foreign Securities Income (FSI) - up to 5 April 2015: NOR/s26A employees - conditions to be met
ERSM160855 · Ascertaining Foreign Securities Income (FSI) - up to 5 April 2015: NOR/s26A employees - duties partly outside the UK
ERSM160865 · Ascertaining Foreign Securities Income (FSI) - up to 5 April 2015: examples
ERSM160867 · Ascertaining Foreign Securities Income (FSI) - up to 5 April 2015: examples: example 2 - non-domiciled employee with overseas employment and associated UK employment
ERSM160869 · Ascertaining Foreign Securities Income (FSI) - up to 5 April 2015: examples: example 4 - NOR employee with duties performed partly in the UK & partly overseas
ERSM160871 · Ascertaining Foreign Securities Income (FSI) - up to 5 April 2015: examples: example 6 - relevant periods including years where remittance basis does not apply
ERSM160873 · Ascertaining Foreign Securities Income (FSI) - up to 5 April 2015: examples: application of the examples from 6 April 2013
ERSM160920 · Just and reasonable override - up to 5 April 2015: example 1 - HMRC-favour adjustment for “wrong” relevant period
ERSM160940 · Just and reasonable override - up to 5 April 2015: example 3 - taxpayer-favour adjustment in respect of leaving employment during the relevant period
ERSM161030 · PAYE and NICs: PAYE - up to 5 April 2015: remittance basis
ERSM161050 · PAYE and NICs - up to 5 April 2015: examples
ERSM161060 · PAYE and NICs - up to 5 April 2015: example 2
ERSM161100 · Remittance - up to 5 April 2015
ERSM161110 · Remittance - up to 5 April 2015: what is remittance
ERSM161200 · Remittance of foreign securities income and the interaction with capital gains - up to 5 April 2015
ERSM161220 · Remittance of foreign securities income and the interaction with capital gains - up to 5 April 2015: TCGA92/S119B
ERSM161330 · Interaction of UK law and treaties - up to 5 April 2015: remittance basis
ERSM161340 · Interaction of UK law and treaties - up to 5 April 2015: remittance basis and time apportionment - example 1
ERSM162200 · International from 6 April 2015: principles of the Finance Act 2014 residence rules for employment-related securities & options
ERSM162400 · International from 6 April 2015: Chapter 5B - taxable specific income
ERSM162520 · International from 6 April 2015: the relevant period - from 6 April 2015: restricted or convertible securities
ERSM162530 · International from 6 April 2015: the relevant period - from 6 April 2015: chapter 3 example
ERSM162540 · International from 6 April 2015: the relevant period - from 6 April 2015: securities acquired for less than market value
ERSM162550 · International from 6 April 2015: the relevant period - from 6 April 2015: securities acquired for less than market value other than pursuant to securities option
ERSM162560 · International from 6 April 2015: the relevant period - from 6 April 2015: post-acquisition benefits from securities
ERSM162620 · International from 6 April 2015: ascertaining chargeable and unchargeable foreign securities income - from 6 April 2015: not s26A employees
ERSM162635 · International from 6 April 2015: ascertaining chargeable and unchargeable foreign securities income - from 6 April 2015: not s26A employees with associated employments - detail
ERSM162645 · International from 6 April 2015: ascertaining chargeable and unchargeable foreign securities income - from 6 April 2015: s26A employees - conditions to be met
ERSM162655 · International from 6 April 2015: ascertaining chargeable and unchargeable foreign securities income - from 6 April 2015: s26A employees - duties partly outside UK
ERSM162672 · International from 6 April 2015: ascertaining chargeable and unchargeable foreign securities income - from 6 April 2015: examples: example 2 - not s26A employee with overseas employment and associated UK employment
ERSM162677 · International from 6 April 2015: ascertaining chargeable and unchargeable foreign securities income - from 6 April 2015: examples: “not s26A” and “s26A” employees
ERSM162740 · International from 6 April 2015: just and reasonable override - from 6 April 2015: example 3 - taxpayer-favour adjustment in respect of leaving employment during the relevant period
ERSM162830 · International from 6 April 2015: PAYE and NICs - from 6 April 2015: NICs
ERSM162845 · International from 6 April 2015: PAYE and NICs - from 6 April 2015: example 1
ERSM162900 · International from 6 April 2015: remittance - from 6 April 2015
ERSM163000 · International from 6 April 2015: remittance of chargeable foreign securities income and the interaction with capital gains - from 6 April 2015
ERSM163040 · International from 6 April 2015: remittance of chargeable foreign securities income and the interaction with capital gains - from 6 April 2015: subsequent adjustments
ERSM163100 · International from 6 April 2015: interaction of UK law and treaties - from 6 April 2015
ERSM163120 · Interaction of UK law and treaties - from 6 April 2015: time apportionment
ERSM163140 · Interaction of UK law and treaties - from 6 April 2015: chapter 5B and time apportionment - example 1
ERSM165100 · International from 6 April 2025: Impact of Finance Act 2025 Changes
ERSM165210 · International from 6 April 2025: ascertaining chargeable and unchargeable foreign securities income - from 6 April 2025: Introduction
ERSM165215 · International from 6 April 2025: ascertaining chargeable and unchargeable foreign securities income - from 6 April 2025: Not s26A employees
ERSM165220 · International from 6 April 2025: ascertaining chargeable and unchargeable foreign securities income - from 6 April 2025: s26A employees
ERSM165225 · International from 6 April 2025: ascertaining chargeable and unchargeable foreign securities income - from 6 April 2025: Non-resident employees and split years
ERSM165230 · International from 6 April 2025: ascertaining chargeable and unchargeable foreign securities income - from 6 April 2025: Sections 41J and 41K - supplemental provisions
ERSM165236 · International from 6 April 2025: ascertaining chargeable and unchargeable foreign securities income - from 6 April 2025: Examples: Example 1 – Grant before 6 April 25 and employee eligible for old OWR
ERSM165237 · International from 6 April 2025: ascertaining chargeable and unchargeable foreign securities income - from 6 April 2025: Examples: Example 2 – Grant after 6 April 25 and eligible for the new OWR
ERSM165238 · International from 6 April 2025: ascertaining chargeable and unchargeable foreign securities income - from 6 April 2025: Examples: Example 3 – Grant before 6 April 25 and employee met s41H(4)
ERSM165239 · International from 6 April 2025: ascertaining chargeable and unchargeable foreign securities income - from 6 April 2025: Examples: Example 4 - Employee met s41H(4) prior to 25/26 & is ineligible for OWR in 25/26 - Hybrid employment arrangements
ERSM165240 · International from 6 April 2025: PAYE and NICs
ERSM165250 · International from 6 April 2025: Remittance of chargeable FSI from 6 April 2025
ERSM170020 · PAYE & NICs
ERSM170100 · PAYE & NICs:Special charges on employment related securities
ERSM170300 · PAYE & NICs
ERSM170400 · PAYE & NICs
ERSM170800 · PAYE & NICs
ERSM180020 · CGT Interface
ERSM180040 · CGT Interface
ERSM190020 · Employer Interface
ERSM190040 · Employer Interface
ERSM200030 · Public Offers
ERSM20020 · Employment-related securities and options: principles: charge on employment-related securities
ERSM20100 · Employment-related securities and options: scope of legislation
ERSM20120 · Employment-related securities and options: shares
ERSM20140 · Employment-related securities and options: loan stock
ERSM20160 · Employment-related securities and options: certificates in respect of securities held by others
ERSM20185 · Employment-related securities and options: options and futures: options
ERSM20191 · Employment-related securities and options: Alternative Finance Investment Bond: Islamic Finance bonds or ‘sukuk’
ERSM20193 · Employment-related securities and options: what are securities: RSUs and dividend equivalents
ERSM20195 · Employment-related securities and options: what are securities: Stock Appreciation Rights (SARs)
ERSM20197 · Employment-related securities and options: ‘interest’ in securities - ITEPA03/S420 (8)
ERSM20205 · Employment-related securities and options: options used for avoidance
ERSM20240 · Employment-related securities and options: who is within the charge?
ERSM20290 · Employment-related securities and options: exclusions: certain control situations
ERSM20310 · Employment-related securities and options: exclusions: residence and split year treatment (up to 5 April 2015)
ERSM20360 · Employment-related securities and options: exclusions: former and prospective employments (up to 5 April 2015)
ERSM20380 · Employment-related securities and options: exclusions: tax-advantaged share schemes
ERSM20410 · Employment-related securities and options: ‘Market value’ - cashless exercise
ERSM20430 · Employment-related securities and options: meaning of ‘consideration’
ERSM20530 · Employment-related securities and options: ways of getting shares
ERSM220050 · Valuation Issues
ERSM220070 · Valuation Issues
ERSM220090 · Valuation Issues
ERSM220110 · Valuation Issues
ERSM220130 · Valuation Issues
ERSM30040 · Restricted Securities: Shares acquired before 16 April 2003: general meaning of chargeable event
ERSM30060 · Restricted Securities: Shares acquired before 16 April 2003: exemption from charge
ERSM30080 · Restricted Securities: Shares acquired before 16 April 2003: exemption from change in the rights
ERSM30200 · Restricted Securities: Conditional shares acquired before 17 March 1998: transitional issues
ERSM30220 · Restricted Securities: Conditional shares acquired between 17 March 1998 and 15 April 2003: scope of legislation
ERSM30320 · Restricted securities: definition of 'restriction' - forfeitable (or conditional) securities
ERSM30340 · Restricted securities: definition of 'restriction' - potential disadvantage
ERSM30360 · Restricted securities: black-out or close periods: USA and UK listed companies
ERSM30380 · Restricted securities: securities acquired for purposes of avoidance - deemed election
ERSM30400 · Restricted securities: calculation of charge
ERSM30415 · Restricted securities: computation of OP
ERSM30430 · Restricted securities: calculation of charge: complex example
ERSM30490 · Restricted securities: relief for NICs elections and agreements
ERSM30505 · Restricted securities: exchanges of restricted securities on or after 17 July 2014
ERSM30507 · Restricted securities: exchanges of restricted securities on or after 17 July 2014 - application of the chapter 2 charging provisions
ERSM30530 · Restricted securities: memorandum of understanding between the BVCA and H M Revenue and Customs on the income tax treatment of venture capital and private equity limited partnerships and carried interest
ERSM50015 · Securities with Artificially Depressed Value
ERSM50030 · Securities with Artificially Depressed Value
ERSM50150 · Securities with Artificially Depressed Value
ERSM50250 · Securities with Artificially Depressed Value
ERSM50400 · Securities with Artificially Depressed Value
ERSM50500 · Securities with Artificially Depressed Value
ERSM60020 · Securities with Artificially Enhanced Value
ERSM60100 · Securities with Artificially Enhanced Value
ERSM60120 · Securities with Artificially Enhanced Value
ERSM60200 · Securities with Artificially Enhanced Value
ERSM61000 · Securities with Artificially Enhanced Value
ERSM61020 · Securities with Artificially Enhanced Value
ERSM61040 · Securities with Artificially Enhanced Value
ERSM61060 · Securities with Artificially Enhanced Value
ERSM700000 · Technical Help
ERSM70015 · Securities acquired for less than market value: definitions
ERSM70030 · Securities acquired for less than market value: cases outside chapter 3C
ERSM70050 · Securities acquired for less than market value: computing the undervalue
ERSM70110 · Securities acquired for less than market value: computation
ERSM70150 · Securities acquired for less than market value: discharge from 17 July 2014
ERSM70210 · Securities acquired for less than market value: money’s worth charge on acquisition
ERSM70410 · Securities acquired for less than market value: acquisition of securities by exercise of option granted overseas up to 5 April 2015
ERSM70425 · Securities acquired for less than market value: UK duties before permanent arrival in the UK (up to 5 April 2015)
ERSM71020 · Securities acquired for less than market value: old regime: computation of notional loan
ERSM71040 · Securities acquired for less than market value: old regime: computation of notional loan: examples
ERSM71100 · Securities acquired for less than market value: old regime: residence issues
ERSM80020 · Disposals for more than Market Value: Definitions
ERSM80040 · Disposals for more than Market Value: Example: stop-loss
ERSM80110 · Disposals for more than Market Value: Fair value
ERSM80130 · Disposals for more than Market Value: Grays Timber Products Limited v HMRC ([2010] UKSC 4)
ERSM90020 · Post Acquisition Benefits from Securities
ERSM90060 · Post Acquisition Benefits from Securities
ERSM90210 · Post Acquisition Benefits from Securities
ERSM90230 · Post Acquisition Benefits from Securities
ERSM90600 · Post Acquisition Benefits from Securities
ERSM91010 · Post Acquisition Benefits from Securities
ERSM91030 · Post Acquisition Benefits from Securities
ERSMUPDATE001 · Employment Related Securities Manual: update index
ERSMUPDATE051215 · Employment Related Securities Manual: recent changes
ERSMUPDATE060313 · Employment Related Securities Manual: recent changes
ERSMUPDATE060505 · Employment Related Securities Manual: recent changes
ERSMUPDATE061117 · Employment Related Securities Manual: recent changes
ERSMUPDATE070510 · Employment Related Securities Manual: recent changes
ERSMUPDATE070705 · Employment Related Securities Manual: recent changes
ERSMUPDATE080814 · Employment Related Securities Manual: recent changes
ERSMUPDATE090428 · Employment Related Securities Manual: recent changes
ERSMUPDATE090615 · Employment Related Securities Manual: recent changes
ERSMUPDATE120806 · Employment-Related Securities Manual: recent changes
ERSMUPDATE121004 · Employment-Related Securities Manual: recent changes
ERSMUPDATE121128 · ERSM - Employment Related Securities Manual: recent changes
ERSMUPDATE130827 · Employment Related Securities Manual: recent changes
ERSMUPDATE130926 · Employment Related Securities Manual: recent changes
ERSMUPDATE131101 · Employment Related Securities Manual: recent changes
ERSMUPDATE150406 · Employment-Related Securities Manual: recent changes

Employment Related Securities Manual
International from 6 April 2025: Contents

ERSM165000 | International from 6 April 2025: Contents

From HM Revenue & Customs · Employment Related Securities Manual

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