Last checked: 20 September 2026. General educational information only, not tax, legal or financial advice. Cross-border equity compensation is highly fact-specific: award terms, work locations, tax residence, treaties and exact dates can change the result.
An RSU can be granted in one country, earned while you work in two countries, vest after you move, and be sold years later somewhere else. That is why the country where you live on vest day is not always the only country that matters.
The practical mistake is treating one award as one tax event. A better map is: Grant → service period → vest → exercise (for options) → sale.
The Better Places four-date map
| Date | What happens | Why it matters |
|---|---|---|
| Grant | Employer awards RSUs, shares or options | Often starts the service period used for cross-border allocation |
| Vest | Conditions lapse and the employee becomes entitled to value | Common employment-income event for RSUs; rules vary |
| Exercise | An option is used to acquire shares | Can create employment income for options |
| Sale | Resulting shares are sold | Can create a separate capital gain or loss |
United States: the IRS gives a clear RSU allocation example
The IRS illustrates the issue with 1,000 RSUs granted on 1 January 2019 and vested on 1 January 2022 at US$15 per share. Total compensation at vest is US$15,000.
During the grant-to-vest period, the employee performed 25% of the relevant services in the United States and 75% elsewhere. The IRS allocates 25% of the compensation to U.S. services:
US$15,000 × 25% = US$3,750 of U.S.-source compensation income.
The later share sale is a separate calculation. The IRS example sells the 1,000 shares for US$20 each, producing a US$5,000 gain over the US$15,000 basis; the treatment of that gain then depends on the individual’s status and facts at sale.
Official source: IRS — U.S. taxation of stock-based compensation received by nonresident aliens.
The important lesson is broader than the U.S. example: where you worked while an award was being earned can matter even if the shares arrive after you leave.
Stock options add another clock
For non-qualified stock options, the IRS explains that compensation income generally arises from the option spread at exercise. But where the option compensates services over multiple years and countries, sourcing can still look back to the service period. There can therefore be an earning timeline and a separate transaction timeline.
United Kingdom: internationally mobile securities have their own rules
HMRC applies special rules to employment-related securities of internationally mobile employees. Its guidance uses a relevant period and, where the international mobility conditions apply, determines how much securities income is connected with the UK.
HMRC says securities income is treated as accruing equally on each day of the relevant period for the statutory calculation, although the detailed chargeable/foreign-income treatment depends on the employee’s circumstances.
The UK rules changed from 6 April 2025
HMRC says the Finance Act 2025 changes altered the treatment of internationally mobile employees alongside the abolition of the remittance basis and reform of Overseas Workday Relief. The revised calculation applies to relevant-period portions on or after 6 April 2025, even where the award was granted earlier.
Official source: HMRC ERSM165100 — international employees from 6 April 2025.
HMRC also confirms that, subject to the detailed rules, securities income allocated to a period when an employee is non-UK resident and performs the employment duties wholly outside the UK can be treated as unchargeable foreign securities income.
Official source: HMRC ERSM165225 — nonresident employees and split years.
Australia: foreign service can split an ESS discount
The ATO says tax residence and country of employment can affect employee share scheme taxation. For foreign residents, Australia generally taxes an ESS discount only to the extent it relates to employment in Australia. Its guidance for temporary residents likewise explains that where employment connected with the ESS interest was performed partly in and partly outside Australia, only a portion may be taxed in Australia under the ESS rules.
The taxing point depends on the scheme. For eligible tax-deferred arrangements, the ESS rules can defer inclusion until a later taxing point. Employment ceasing on or after 1 July 2022 is no longer itself a deferred taxing point.
Official source: ATO — Key ESS changes in detail.
Canada: stock-option reporting changed for 2026
Canada’s stock-option rules are not the same as the U.S. RSU sourcing example. But mobile employees should preserve the employer reporting trail. CRA’s current employer guide says that for 2026 and later calendar years, security-option benefits and related deductions use T4 codes 38, 39 and 41. Code 38 reports the taxable security-option benefit; codes 39 and 41 concern specified deductions where their conditions are met.
Official source: CRA — Employers’ Guide: Filing the T4 Slip and Summary.
Build a Service-Day Allocation Ledger before moving
Create one row for every unvested award — and, ideally, every vesting tranche.
| Field | Record |
|---|---|
| Award | RSU, restricted share, option or other ESS interest |
| Grant / vest / exercise dates | Exact dates for each tranche |
| Service period | Period the award compensates under the applicable rules |
| Work locations | Service days in each country |
| Tax residence | Status for each relevant tax year |
| Taxable value | Market value and exchange rate at the taxing event |
| Withholding | Tax withheld by country |
| Share basis | Post-tax basis needed for the later sale |
The ledger is not a legal tax formula. It preserves the facts needed to apply one.
Worked scenario: 720 service days across two countries
Assume an RSU tranche has a 720-day service period, with 240 service days in Country A and 480 in Country B. The employment-income value at vest is US$30,000.
Country A ratio = 240 ÷ 720 = 33.33%
Illustrative Country A amount ≈ US$10,000
Country B ratio = 480 ÷ 720 = 66.67%
Illustrative Country B amount ≈ US$20,000
This is deliberately a planning illustration. A country’s law or treaty can define the relevant period differently, exclude days, apply residence rules or provide relief for tax paid elsewhere. But it shows why recording only your country on vest day can be inadequate.
Why every vesting tranche deserves its own row
Suppose 4,000 RSUs vest 25% each year over four years and you move after Year 2. The first tranche may have only Country A service. The third and fourth can contain increasing amounts of Country B service. Combining all 4,000 units into one spreadsheet row destroys information that may later be needed for allocation.
Better rule: one row per vesting tranche.
Employment income and the later capital gain are different questions
Imagine shares worth US$30,000 are delivered at vest and the applicable rules treat that value as employment compensation. You later sell them for US$36,000.
The first question is how the US$30,000 employment benefit is taxed and sourced. The second is how the later US$6,000 increase is treated, what basis applies, where you are resident at sale and whether another country also claims taxing rights.
That is why the vest or exercise value and exchange rate should be preserved even after payroll has finished withholding.
Withholding can differ from the final liability
Employer payroll withholding is evidence, not necessarily the final answer. A current-country payroll may withhold at vest while a former work country also has a service-period claim. Conversely, overlapping withholding may require treaty or foreign-tax-credit relief.
Before a cross-border vest, ask payroll or the equity-plan administrator for the award ID, service period, country allocation, taxable value, exchange rate, withholding by country and the basis reported to the broker.
Three move scenarios
1. Move before the first vest
You receive a four-year RSU grant, work 18 months in Country A, then move to Country B before the first vest. A service-period rule may still connect part of the first and later tranches to work performed in Country A.
2. Exercise vested options after moving
You earn and vest options in Country A but exercise after becoming resident in Country B. The exercise may trigger compensation income while sourcing can still look back to the services that earned the option.
3. Sell shares long after vest
You already paid employment tax when RSUs vested, then move and sell the shares later. The move may now affect the capital-gain layer rather than the original employment-income layer. Our separate guide to arrival-day investment valuation and capital-gains basis explains why migration dates can matter for investments you continue to hold.
The seven records to download before leaving an employer or country
- Grant notices and full plan rules.
- Vesting schedules by tranche.
- Broker statements showing vest, exercise and sale transactions.
- Payroll statements showing taxable compensation and withholding.
- Workday calendars showing where duties were physically performed.
- Tax-residence and move dates.
- Market values and exchange rates used at each taxable event.
Do not rely on permanent access to an employer equity portal after changing jobs.
How this fits with the rest of a cross-border move
Equity compensation is only one layer. If your employer has approved the move, our working-abroad payroll and permanent-establishment checklist covers the employer-side questions. If you move during a tax year, our part-year and split-year guide helps identify the residence transition. And the 183-day rule guide explains why day counting alone does not settle tax residence.
The Better Places decision rule
Before moving countries with unvested equity, do not ask only, “Where will I live when this vests?” Ask:
- What service period earned this tranche?
- Where did I physically perform those services?
- What event creates employment income in each country?
- What did each payroll withhold?
- What basis will I use when I eventually sell the shares?
A move changes your address immediately. It does not erase the employment history embedded in an RSU or stock option.
Official sources
- IRS — U.S. taxation of stock-based compensation received by nonresident aliens
- HMRC — Internationally mobile employees from 6 April 2025
- HMRC — Daily accrual
- CRA — Employers’ Guide: T4 reporting
- ATO — Foreign service and employee share schemes
Method and limitations: IRS, HMRC, CRA and ATO public guidance was checked on 20 September 2026. The four-date map, Service-Day Allocation Ledger, 720-day scenario and tranche-by-tranche framework are original Better Places analysis. The simplified allocation example is not a substitute for the specific domestic law and treaty applying to an individual award.
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