From until I worked in the United States for a European based multinational company.

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I am British and since the end of have lived in the UK. As part of my remuneration I was awarded stock options in the parent company which vested when I left the USA and the company's employment at the end of As the options came in annual increments with different expiration dates I have been exercising them over the past 3 years.

Frank Denneman

When I exercise the options the online broker withholds federal and state income tax as well as US social security taxes. The resulting proceeds then show up on a W2 which my former employer sends me at the end of the year. I have then submitted US federal and state tax returns, as a non-resident, which usually results in a refund of the federal and state taxes. My first question is whether this is correct?

I have been declaring the capital gains on my UK tax return each year. My second question relates to the foreign tax credit relief. Here there are sometimes timing issues which make things a bit tricky. At the time I submit my UK tax return I usually have not received the US tax rebate, so I have been claiming the FTCR.

How then should I treat the US tax rebate when it is received? Or is it income? The latter would seem inconsistent with the general treatment of the proceeds as a capital gain.

This is a complex area. Thanks for taking the trouble to reply. I think you are right. Are there any advisers out there who do not cost an arm and a leg?

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I would be most grateful for any advice. Please login or register to join the discussion.

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