AUSTRALIAN TAX TREATIES

United Kingdom Convention   2003 UNITED KINGDOM NOTES

No LGB 03/170  

8.  
With reference to Article 14 (Income from employment), the Contracting States agree that:


(a) income or gains derived by employees in relation to share option schemes shall be treated as "other similar remuneration" for the purposes of Article 14;


(b) unless the facts otherwise indicate, the period of employment to which the option relates shall be taken to be the period between the grant of the option and the date on which all the conditions for its exercise have been satisfied (the vesting of the option); and


(c) where a resident of a Contracting State derives such income or gains, and


(i) the period of employment to which the share option relates is the period between grant and vesting of the option;

(ii) the employee remains in that employment at the date of alienation or exercise of the option; and

(iii) that employment has been exercised by the employee in the other Contracting State during all or part of the period between grant and vesting of the option;
the proportion of the income or gain which shall be attributable to employment exercised in the other Contracting State shall be determined in accordance with the ratio of the number of days of employment exercised in that State between grant and vesting of the option to the total number of days of employment exercised between grant and vesting of the option.



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