You receive shares through work, some are taken to cover tax, and the rest appear in your broker account. It is understandable to think the tax has already been dealt with.
But receiving the shares and selling them are two separate events. Income Tax usually applies when your RSUs vest and you receive the shares. Selling them can then create a Capital Gains Tax bill.
That does not mean paying tax twice on the same value. It means checking what has already been taxed through your employment and what happened afterwards.
What happens when your RSUs vest?
Restricted stock units, usually called RSUs, are a promise from your employer to give you shares once certain conditions are met. Often, you need to remain employed until particular dates.
When those conditions are met, the award “vests”. Under a typical RSU scheme, you then receive the shares. There is usually no Income Tax bill when the award is first promised to you. Instead, the value of the shares when you receive them is taxed as employment income.
This guide focuses on the usual share-based award. Schemes that pay cash or delay delivery of the shares can work differently, so the award terms matter.
For shares in a listed company, your employer will normally collect the Income Tax and any National Insurance through payroll. The starting point is the value of all the shares that vest, not just the ones left after tax has been taken.
This extra income can also affect your tax-free Personal Allowance. It starts to reduce when your income, after certain deductions such as qualifying pension contributions, exceeds £100,000. Your salary might be below that figure, but your share awards and other income can take you over it.
Why have some of your shares been taken for tax?
Rather than asking you to find the money yourself, a scheme may sell enough shares to cover the tax. This is often called “sell to cover”. Another method is to hold back some shares and give you the balance.
That can leave you with noticeably fewer shares than the number shown as vesting. It does not necessarily mean anything has gone wrong: part of the award has been used to meet the tax bill.
The deduction may include Income Tax and National Insurance, rather than Income Tax alone. Some schemes also require you to meet the employer’s National Insurance cost, which should be checked against the terms you agreed.
When we review these records, we compare the share release statement with the payslip. We check how many shares vested, how many you received, what was sold or withheld, and how the deductions were recorded.
The question is not simply “was tax taken?” It is “what did that payment cover, and is there anything else to report?”
Will you pay tax again when you sell?
You may have a capital gain when you sell the shares, but you do not normally calculate it by treating the shares as having cost you nothing.
For a straightforward RSU award, the value already charged to Income Tax generally forms the starting cost for the Capital Gains Tax calculation. The UK’s share-matching rules can then affect which cost is used for a particular sale.
For a simple illustration, suppose 100 shares vest at £50 each. You pay the tax without selling any shares, so you keep all 100. You later sell them for £65 each.
- Value when the shares vested: £5,000.
- Amount received when you sold them: £6,500.
- Capital gain before selling costs: £1,500.
The potential capital gain is £1,500, not the full £6,500 you received.
This example assumes you have no other shares of the same type in that company and do not acquire any more within 30 days after the sale. Repeated vesting dates and other purchases can change the calculation.
Selling immediately after vesting may leave little or no gain, but it is still worth checking the actual sale price and costs. Keep details of shares sold to cover tax as well as shares you choose to sell yourself.
Can you use the figures on your US broker statement?
Your broker statement is an important record, but it is not necessarily a UK tax calculation.
For example, a US tax document may show a “cost basis” that does not include the value already taxed through your employment. Copying that figure without checking it could make the gain look much larger than it should. Fidelity explains this distinction in its own stock-plan guidance.
Currency also matters. The UK calculation needs values in pounds at the relevant dates. It is not generally enough to work out the profit in dollars and convert that profit into pounds when you sell or transfer the money home.
If you receive shares regularly, the UK rules also determine how sales are matched against shares you already owned or acquired around the sale date. Choosing a particular batch in your broker account does not necessarily determine the cost used for UK tax.
This is why we ask for the transaction history and vesting records, rather than relying only on the broker’s headline gain or loss.
Do RSUs mean you need a Self Assessment tax return?
Not automatically. Receiving RSUs does not, by itself, mean you need a return where the income has been dealt with correctly through payroll and there is no other reason to file.
However, untaxed share income, gains from selling shares or other income can create a reporting requirement.
For 2026/27, the annual Capital Gains Tax allowance is normally £3,000. That applies to your total gains across the year, not separately to each share sale or broker account. If you are already registered for Self Assessment, sales of assets subject to Capital Gains Tax totalling more than £50,000 must also be reported, even where the gains are below your allowance.
There is another important check when preparing the return: share income that your employer has fully taxed is normally already included in your P60 or P45. Adding the same income again as a separate share award can count it twice. The share-sale calculation is a separate matter.
What if you have moved into or out of the UK?
A move overseas does not automatically remove UK tax from an award that vests later. Equally, moving to the UK does not necessarily mean the whole award should be taxed here.
Where you lived and worked while earning the award can matter, often across the period between grant and vesting. Looking only at where you were on the vesting date may give the wrong answer.
Tell your accountant about the move at the outset, including any overseas work and tax already deducted. That gives them the information needed to check whether a more detailed cross-border review is required.
How Thames Williams can help with your RSUs
You should not have to guess whether your payslip and broker statement are telling you the same thing.
At Thames Williams, we can review the employment income and share transactions together as part of your Self Assessment tax return. We check what has already been reported through payroll, calculate gains or losses using the UK rules, and explain what needs to go on the return.
To get started, we would usually ask for:
- Your P60 or P45 and payslips covering the months when shares vested.
- The award and vesting statements, including details of shares sold or withheld for tax.
- Your broker’s transaction history, including earlier holdings where relevant.
- Details of dividends and any periods when you lived or worked overseas.
You do not need to work out the tax before contacting us. Start with the documents you have, and we will explain what else is needed.
If your shares involve work in more than one country, missing historical records or a possible correction to an earlier return, we will identify that separately and agree the work and fees before proceeding.
Need help with your RSUs and tax return?
Tell us which company awarded the shares, which tax year you need help with, and whether you have sold shares or worked overseas.
We will explain how we can help, what information we need and the fee for the work.
Talk to Thames Williams about your RSU tax return
This article provides general guidance. Your award terms and personal circumstances may change the tax treatment.
