Jurisdiction(s):
United Kingdom

UK income tax on employment-related shares and securities under ITEPA 2003: general earnings (Weight v Salmon), residual benefits and jurisdictional scope for employees and office-holders

Published by a LexisNexis Share Incentives expert

Practice notes

The main charge on earnings and the residual benefits charge

When an employee or director acquires, holds, or disposes of shares or other securities by reason of their employment, one or more income tax charges on employment income may apply. These key charges relate to:

earnings—the Weight v Salmon charge
residual benefits
employment-related securities
notional payments giving rise to income tax:
- payable by the employer through pay as you earn (PAYE), and
- not repaid by the employee to the employer within 90 days after the close of the relevant tax year (referred to in this note as notional payments not made good)

The charges on earnings and on residual benefits are outlined below. They are especially pertinent where an employee or director obtains shares in their employing company (or a connected company). Those shares might be issued directly to a new joiner or director, or transferred by an existing shareholder.

To show how these charges fit within the wider income tax framework on employment income, this Practice Note first sets out:

the difference between general earnings and specific employment income, and
the meaning of employment for these purposes

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Web page updated on 22/05/2026

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