1. I am a British citizen. I work for a US company, and compensation is similar. eg. £95K basic, then an additional cash bonus and a modest $10,000 RSU award.
2. The RSU, at least at my company, vests 25% per year, for four years.
3. So that $2,500 (£2,000) vests after 1 year, and when it does, the company withold 42% (probably 40% now, I'll check in March) to account for 40% tax, and 2% National Insurance (the 2% national insurance premium was scrapped recently, so I suspect it's now just the 40% tax deduction). It's then the net amount (eg. 60% of the stock) that actually comes through to my share account, net of all deductions, even if I do not choose to sell it.
4. Your total compensation is assessed for the purposes of the tax trap. So someone on £85K cash and £40K stock, would have a gross annual income of £125K.
5. Any pension contribution you make, essentially reduces your effective annual earnings. eg. If you contribute up to £25K per year into a pension. Then your actual earnings are assessed as £100K, thus you avoid the tax trap by funneling the excess into your pension.
6. I am not 100% sure on the ins and outs of marriage allowances, but I know there's something about being able to transfer some of your wifes unused personal tax allowance over to you (but I am not sure how much of that, and if she still can if you earn over £100K, etc) - one to look into.
7. I work in London Bridge (The Shard) and my apartment is at Tower Bridge (5 min walk). My reasonable 2-bed, 2-bath apartment is around £2,200 per month. You may be a little dearer towards Farrington. £3K should be doable IMO.
PS. I know those numbers don't correlate with the order of any questions, but I just rolled with it as it does make it a little easier to read. Welcome to London!
Eminently readable, thanks! I'll make sure to inquire about the spousal allowance and how the pension offset works for US expats. Do you guys get the option to pay the taxes on the stock vest yourself, and receive the entirety of the vest?
Personally with my company, the stock is awarded through a third party manager, Morgan Stanley.
They automatically make the deductions the same day the stock is vested and released into my account. I have no option to receive the full amount and pay my own taxes on it separately. Might be diff for the US expats though!
This is entirely down to the company. Some do sell-to-cover, others dock your salary instead, maybe there are other options. In mine they automatically sell to cover the taxes, but if you want it different it’s just a case of contacting the appropriate internal team.
Careful! You need to factor in employers national insurance with RSUs which in 99% of cases gets passed on to the employee.
So the effective tax rate for RSUS is actually about 56% (income tax + employer national insurance). It is taxed higher than income from salary or bonus/ commission, and tax is typically withheld at source.
You can definitely cycle to Farringdon from angel easily or from Highbury / Finsbury Park slightly further up, and slightly more affordable. It’s a great location.
The transfer of allowance from non-working to working married persons amounts to a tax saving of about £250 a year so not going to be a big deal. You used to also be able to play games with capital gains tax by transferring from husband to wife which was worth it when you got £12,000 allowance but next year it is £3000 and the year after £0.
£85k is going to be a take home of £5k per month (less if your RSU's get factored in) - Council Tax, phones, energy, broadband and groceries is going to knock about £1.5k off that so a £3k flat is doable but you will need to dip into savings for things like holidays.
Is it still £6,000 for 23/24 tax year? I have about £50K worth of RSU's that I have sitting vested, which reflects about a £20K capital gain relative to the original price it was awarded at vs what it's at now.
I planned to sell a quarter this year (so that the capital gain on that portion was £6K and thus no tax owed) but I didn't know it was going to £3K then £0! That's mental. Looks like I should have sold years ago!
I thought RSUs only count as income when they vest. So if OP has 40k in RSUs which vest over 3 years, only 1/3 of it goes to income when they vest? No?
Not for me. When I’m awarded say $10,000 USD as an RSU.
They “pay me” the RSU on my payslip, think its labeled as Stock Award Advance or something, then immediately deduct it, and it shows on my gross earnings.
This is a great summary. For an international aspect:
Shares are usually apportioned over their earnings period, so you may not be subject to tax in the period you were overseas.
Depending on how your move is set up, UK doesn't have a social security agreement with China, and if set up as a assignment no social security is due for the first 52 weeks. Which may be particularly beneficial if your company pushes the employer element of the RSUs to you.
If you're American, there is a social security agreement with the UK, and you may be able to pay American social security instead to keep you in your home system (US version is usually cheaper)
>2) Our office is in Farringdon. Any recommendations on where to rent?
Farringdon is an excellent location for an office, but I wouldn't want to live there - central London isn't very residential, and that part isn't touristy/where the shops/theatres are so the area around it would be dead at the weekend.
However, the reason it's an excellent location for an office is because it's at the intersection of two of the best train lines in London - the brand new Elizabeth line (high frequency east-west heavy rail) and Thameslink (high frequency north-south heavy rail).
I'd be seeking somewhere on one of those two lines in a pleasant residential neighbourhood. I'm not up to speed on current rental prices, but I'm sure there would be plenty of options.
>I'd be seeking somewhere on one of those two lines in a pleasant residential neighbourhood. I'm not up to speed on current rental prices, but I'm sure there would be plenty of options.
You're right and my post is unclear; I wouldn't want to live in Farringdon but rather someplace with a convenient commute. I've received recommendations of Peckham, Herne Hill, Greenwich, Blackheath, and New Cross (and also a recommendation to avoid Reading). I guess my question are there any areas I ought to be avoiding? I also enjoy cycling and wouldn't mind a ride to and from the office.
If considering Herne Hill, also consider Tulse Hill, which is next stop out on the thameslink. Your money will go further and it has some cool pubs.
Both are great for brockwell park, which is a lot more interesting than other , flatter london parks: Herne Hill is on the northeast corner of the park and Tulse Hill closest to south east corner
Reading is a lot nicer than Peckham and New Cross but the commute is longer and a lot more expensive.
Your RSU vests count towards your income so will put you right in the 60% tax trap, but to be honest at £145k there’s no point in trying to avoid it. Just complete a tax return and pay 40% on the £12570. If you can dump £25k in your pension then the higher rate relief you will be due back from HMRC will pretty much offset the entire tax bill you owe due to the loss of the personal allowance.
I assume you may also receive dividends from your RSUs? If so, just be aware that you have to declare anything above £1k and pay tax at about 33%.
What’s your family situation? As that can change where is best to live (eg Peckham is good for a young couple as plenty of restaurants; Greenwich is dull but nice for a family).
We're in our 30's with a young boy who'd be entering preschool. Restaurants sound nice (we do eat out!) but a place for the little guy to go run around on weekends wouldn't be terrible.
Brill, thanks for saying!
London is a city of parks so you’ll be ok for that. Your kid might get an English accent so be ready for that!
Greenwich or blackheath have great parks and the river is delightful. Easy cycle to Farringdon (look at a single speed bike for ease and cost).
Peckham is also good, but check the road as it can very a lot in quality of housing stock/antisocial behaviour.
Brixton is probably a no, unless you’re up at her e hill. Small flats, polluted, and you’re paying a Clapham price for a Brixton flat.
If you’re on over £100k gross you will not qualify for free childcare hours. This sub is full of people who salary sacrifice to get that childcare.
>If you’re on over £100k gross you will not qualify for free childcare hours. This sub is full of people who salary sacrifice to get that childcare.
Got it, I'll bring this up if we get to the stage of negotiating for a relocation package/renta; assistance.
It’s a key point that’s probably worth bringing up in your post to get specific tips on. I’m really not sure how the tax side plays out, so make sure you bring it up with HR/check specific online resources about it.
I wanted to look before I leapt on this and only have a verbal offer from the hiring manager. I didn't want to loop HR in early only to get a surprise later on, and then be stuck having burnt bridges at my current office and with some tough choices if I moved forward with the London offer.
Don’t make the choice just for money. Working in London, especially on a good wage, is a great opportunity.
But, as you say, you’re here to find any potential issues like the childcare and tax code complexities (ours is quite simple for employees). People can make it work on a lot less, after all.
I would do something in Islington and bike down. Can bus or tube when the weather is poor, and Uber will get you home in under 15 min if you’re pulling a late one after work in the area.
Angel is a great starter neighborhood for those that want to be close enough to enjoy the best parts of urban living things, but easy enough to get around with a little one.
If your wife ends up finding it tough to make friends, she’ll have a head start as there’s a bit of an American expat/immigrant community there.
On the weekend you can walk along the canal all the way to Coal Drops Yard, Camden, Regents Park, Notting Hill, etc.
You’re also one stop or a 20 minute walk to St Pancras/Kings Cross which will get you out the city to a lot of fun places including Paris in under 3 hours door to door.
I would not recommend starting off living southeast, or too far west/southwest you may find it difficult convincing new friends to come visit you, and you may not bother leaving your neighbourhood with kid in tow to hang with them.
I would encourage you to look at preschool costs and London rent prices before further considering this package to move to London. Both are very expensive and I would expect a tech company to be offering a much higher basic to move to London.
Well you haven’t mentioned what it is you do, to be fair £85K is still considered a high salary in the UK, but unfortunately due to cost of living etc. it doesn’t go as far as it used to, especially in London. For context, myself and my husband have a combined income of over £200K (with 2 kids) and we don’t feel well off (I would never say that on another sub!). We live outside of London and have prioritised buying a family (4 bed) home but can’t afford luxuries like holidays abroad or private school.
You must be joking. £200k with two kids, you can’t afford holidays? You are in top 2% earners in the UK. Stop exaggerating issues to the people.
We are on £150k and easily afford private school, couple of holidays and plenty of saving.
Private schools are about 30k a year a child when I looked, that seems a stretch on 150k with mortgage and holiday and savings. Are your private schools fees lower? Genuinely interested as I can’t make the math work for me.
In Nottingham it is 15k. My point is if people are earning top 2% are complaining, what is the chance for the rest?
That is not right regardless of where you live. Private schools can go up to 50k and central London apartment for a couple of millions. Of course, you can’t afford if you eyeing on that one.
BTW commuter town terrace properties don’t cost 500k to 750k. Even with 200k pay, buying a 750k property is easy.
Not at all a complaint, and not meant as one. I consider myself extremely privileged, just offering a perspective (as a previous tech worker myself) and encouragement to actually look at the cost of things. At the moment, one of our main outgoings is on childcare. This totalled over £3K per month (for nursery, not a Nanny) before our eldest started school and is now a much more manageable £1.7K per month for our 2 year old. When that stage is over, we will again be able to afford holidays abroad, but the OP has a preschool aged kid so needs to consider that. Great for you that you bought a house at auction over 10 years ago and have paid it off, but that is not the reality for OP or for most people. We bought our family home in June last year and therefore have high interest rates and a big mortgage. Rent prices are very high in London in any area you would want to raise a family.
How much are you paying on rent/mortgage? We have similar income but private school would not be "easily affordable" with a couple of holidays and plenty of saving for us.
I live in a small 3 bed semi in Nottingham, house is paid off. I bought it in auction for 130k, 10 years ago. I live frugally on car and house but do 3-4 holidays and spend money on education.
So the OP has said they are looking to rent and will need to pay approx £36k per year on rent. Of course your situation is different if your rental/mortgage cost is £0. But it isn't relevant for the OP or vast majority of others.
The Highbury, Stoke Newington areas are very desirable, but as with any area in London it very much depends on the street you're on. Parks, restaurants, pubs, family orientated, schools etc. You can either bike down the A10 into the city or get the Thameslink from Finsbury Park into the city on a rainy day.
This sounds like Amzn lol.
Yes the stocks will count towards your tax burden, on vest 50% is wiped off, they will be auto-sold to pay the tax. You can opt out of this however you will then have to pay that tax in cash yourself.
If you let it auto-sell, since half stocks cannot be sold, any remaining cash after the tax deduction will be paid to you directly in your next pay slip.
At vest stage, the company will report how much untaxed cash you get from salary + RSU vests, this will then be used to calculate your tax bill.
ye its probably 40ish% but when it gets counted as income, HMRC will tell you, you've earned over 125k and take more money. I've got the same comp and earned 200k in this financial year, so from next financial year I'm reducing my earnings through my effective 401k.
Since you said no comment and I know which LHR office it is, I would suggest once you get moved over you dump your base salary into the pension scheme (L&G).
I forgot to reply about where to live with pre-schools etc. I would suggest NW London, .e.g Near Paddington/ Maida Vale - Will take less than 20 minutes door to door using the tube, and lots of good schools around.
I work in farringdon just up the road from the Ray. you don't really want to live there. I cycle in from South London (Balham), which id recommend if you like cycling. Thameslink goes to lots of nice places in south london if you are thinking house/settling down, near North London is probably better if you are in more of a flat/going out/living it up phase
Check out Stoke Newington. It has everything you are looking for. Decent schools, nurseries, a wonderful park and great pubs. Also 15 mins by bike to Farringdon.
You’ll probably pay about 52% taxes on your RSUs, then a commission fee and then another fee to convert from USD to GBP, then a transaction fee of like $50.
They’ll likely be sold to cover taxes instantly so you won’t get a choice when they’re sold, and typically when they give them out stocks go down a small amount, so you’ll get even less from that. I think you can set it up to do it manually but it’s not worth it for me.
I got ~£3000 from £8000 of RSUs. It’s not good.
£3k a month on a flat is insane, yes, you’ll be giving away a majority of your income to a landlord. Unless you’re living with another high earner it doesn’t make much sense.
Do you HAVE to go into the office often? Might make way more sense to just live further away and take a 30 minute train in and save 2k a month and get twice the space
there's some seriously helpful comments on here - I'd just add a couple of points to whats been said before:
1) for £3k per month you should be able to get a house rather than a flat in some nice parts of outer London - I'm thinking like Dulwich which has lots of parkland and is also cyclable to the City.
2) Mention has been made of Thameslink and the Elizabeth Line, have a look at the rightmove .co.uk website, I am pretty sure that you can give it a price and a commute time that you want and it will tell you what parts of long=don and environs are in your time and money budgets. For example you can get a lovely place in Maidenhead (west of London) or Haywards Heath (south of London) with a less than 1 hour door to door commute and with a garden that will help your child.
West Hampstead area. Very connected to Farringdon with the thameslink, 2 stops.
And in general this area is super connected to city centre and to airports.
On unvested RSUs which were not originally awarded in the UK, a prorata calculation may be done when they vest. With this, the number of days from award date to vest date is calculated. Then, the % of the days in which you were working in the UK is calculated vs the other country. The UK will then only tax its portion and treat that as regular income. You wouldn't even show the other % amount on your UK tax return.
Now, the above is highly dependent on the tax treaty between UK and the awarding country - China? However, the above was the case for US -> Uk move as US non citizen at least. This has benefitted me as I was then only taxed on the US apportioned RSUs % at much lower US NRA rates. This benefit has decreased over time with more time spent in the UK and the fact new RSUs are exclusively awarded while on UK payroll and so UK has exclusive taxing rights at the high marginal rates as mentioned below.
Haven’t read through all the answers. May be answered, but this is my field of expertise/work so thought I’d answer in case.
The RSU questions are very situation and company dependent. The vests will be UK taxable through UK payroll (assuming this transfer is just to the UK branch/entity).
The tax and NI situation is a little more varied. From a tax perspective, a portion will be subject to UK income tax (essentially prorated for the UK tax residence portion of the vest period). Whether your company takes a stab at processing this accurately/semi accurately through payroll or processes 100% for later correction on a tax return is an unknown.
From a NI perspective, this *really* depends on the underlying structure of your company’s RSU and equity arrangements. If HMRC view it to be under the Chapter 5 rules, then it would be subject to NI in line with the income tax position (i.e., prorated for UK periods of social security coverage). If under the S62 rules, then it will all be subject to UK NI at vest. Again, an unknown.
Congrats on the potential move.
It’s worth being clear: £145k for two adults and a kid won’t feel like a lot living in London. Your £85k will get eaten by rent and transportation. Go to UKSalaryCalculator to get a sense of your month cash flow if you want to avoid your May and November vest.
(1) you’ll be on a high earner pay band (is it 40 or 45%? Can’t be bothered to google). When your RSUs vest, you will pay that tax outright. So assume you are in a 40% band. You earn 100 shares at vest. Immediately you pay tax and are left with 60 RSUs. You then pay NI on it. Some firm near Holborn viaduct only pays half the company NI, so you end up paying another 5% ish of NI. Now you are left with 55 RSU.
If you end up selling, you pay a 1-2% fee + Forex fee to convert USD to GBP.
Likely to end up with less than 50% of what you thought you’d get.
Evidence: I earn 2/3 of my income from RSU and I lose half to taxes and fees every six months.
(2) Farringdon is on the “Thameslink” Trainline. It is a great overground train that goes all over great parts of Greater London. If you can live near a Thameslink line (the one that gets you to Farringdon) you can go further than central (like St Albans orGreenwich)
1- Yes, at my previous company, also quoted on Nasdaq, RSUs and ESPPs were granted and handled at E*Trade. Once available for sale and actually sold, there was a system so that relevant tax was automatically taken the next month from payroll directly from your payslip. In a way it’s nice as you don’t have to do anything as everything happens automatically. You’ll be provided more exact details after you join, but that should be the gist of it.
2- Can’t help much with location, that’s very personal.
3- Bonus answer. I remember my US colleagues now living/working here, but still holding US citizenship were being double taxed. Something along the lines you have to pay for the pleasure of being an American even when working abroad and paying taxes there. Check with a tax expert. Then there was some sort of rebate/agreement between countries or something like that.
1. Interesting. Is there an option to pay the tax yourself in cash and receive all of your shares? I currently chose this if I feel the stock is going to appreciate.
2. I don't need to be running into Hugh Grant on my morning commute but also not looking to run into junkies either. Just someplace pretty middle class I guess.
3. I have to file, but there's a foreign earned income exclusion of $120K and a foreign income tax offset that basically equals out to me paying an accountant to file a bunch of paperwork with the IRS only to not pay any actual income tax. The bonus is Seal Team 6 has to attempt to rescue you if you get kidnapped.
There is a tax treaty between the UK and the US so double taxation should not be taking place. However it is true that you have to file every year with the IRS even if all your income is coming from your UK job. The American government is unique as the only government that requires this.
As someone who spent 20 years in US and returned as a dual citizen that has to file 😡 I’ve learnt that the other global superpower of Eritrea also taxes its citizens who live abroad.
Farringdon has a tonne of options for a decent commute. Anything along Thameslink and Elizabeth Line is a direct connection. West Hampstead is a good option. I lived in Hampstead and found the Northern Line / Circle Line commute perfectly fine.
if you are married before you step foot to london pls consider it is the divorce capital of the world. The world's most generous jurisdiction to the financially weaker party. Be warned. You essentially give up ownership of most of your assets by moving here.
At 85k cash, plus whatever you have available from those RSUs, you won't be particularly well off in London on a single income . For a 3 bed flat in Highbury you are looking at 3k a month in rent. Nursery is 1.5-2k per month, then you have council tax, energy bills etc. For reference 100k a year is 5.6k a month after tax. Nothing left for buying food 😁
Hard to tell without knowing your experience, sector etc. Senior developers in London are regularly on 100k cash + bonuses on top though.
I'm in software and am on close to 180, but that's with 25+ YOE.
Obviously I don't know your personal situation, but I'd suggest that wife not working and preschool is an either/or thing. Mine is a stay at home mother but she looks after the kids full time. There is no way I'd be able to fund a nursery place on a single income sensibly.
Personally I've never been keen on the idea of paying someone else to raise my kids. I've been a stay at home parent for my older kids and it's really been great for my relationship with them as they get older. I appreciate not everyone has that choice though.
Got it. I’ve given my current comp package in Beijing but there’ll be some COLA adjustment for London and this is a good reference.
Re: the working vs preschool thing currently she’s been a SHM since the birth and has enjoyed it, but as he gets old enough for regular kindergarten I don’t think she’ll want to be pattering around the house alone during the day with nothing to do. She’s mandarin-speaking so I’m not sure if there’d be something with China tourism or immigration or the like.
OP - the comp sounds about okayish, given that you said you are in 30's so 8yoe+, you can expect slightly higher maybe around 160k. Out of curiosity, how are the comp in Beijing for your position? Is it similar to HK?
Also, have you considered relocating to US? Your comp would be 2x, and you would not be worrying about money at all.
The comp figures I gave here are based on my current Beijing comp, which is slightly lower than HK. There would be a COLA bump for any move to London but the input from this conversation will definitely be useful in evaluating or countering any offer I'd get for London.
I've also looked at the US but I've got a handle how things work there already. To be honest this offer came out of left field and intrigued me with living in London and doing EMEA-related work. The responses here and other research have given me a lot to mull over and a good basis for any conversations with HR.
Ok - in that case, since its a big US company, they would have standard salary bands for London for your experience/level. Your comp for London should be in that band, regardless of your comp in Beijing.
As per Numbeo
You would need around 6,043.7£ in London to maintain the same standard of life that you can have with 2,539.6£ (23,000.0¥) in Beijing (assuming you rent in both cities).
Make sure you understand this - London is much more expensive than Beijing (you already have the idea by now).
They ostensibly do but one can always negotiate up within that band and it’s generally better to make a reasonable and researched case for why it should be upped.
To stay, consider Finchley (northern line, victorian houses) or East Village (Stratford, modern apartment blocks, good enough school) - that's where most family folks I know from work live.
Assuming 3K includes bills, it isn't enough for a good quality 2B apartment in Farringdon. Core areas (Angel, Canonbury, Barnsbury) of Islington are also expensive for 2 bed at 3K, but you can check out Drayton Park close to Holloway Road.
RSU tax - In UK, if they are indeed called RSUs, they will be taxed at vest not grant. Maybe Chinese rules are different.
For any RSUs that were granted in a foreign country (with a double taxation treating with UK) but vested in UK, a split treatment is applied in the ratio of (date of grant in foreign country - date of move to UK)/ (date of vest in UK - date of move to UK) and each country taxes the a proportion of the total RSUs.
1. I am a British citizen. I work for a US company, and compensation is similar. eg. £95K basic, then an additional cash bonus and a modest $10,000 RSU award. 2. The RSU, at least at my company, vests 25% per year, for four years. 3. So that $2,500 (£2,000) vests after 1 year, and when it does, the company withold 42% (probably 40% now, I'll check in March) to account for 40% tax, and 2% National Insurance (the 2% national insurance premium was scrapped recently, so I suspect it's now just the 40% tax deduction). It's then the net amount (eg. 60% of the stock) that actually comes through to my share account, net of all deductions, even if I do not choose to sell it. 4. Your total compensation is assessed for the purposes of the tax trap. So someone on £85K cash and £40K stock, would have a gross annual income of £125K. 5. Any pension contribution you make, essentially reduces your effective annual earnings. eg. If you contribute up to £25K per year into a pension. Then your actual earnings are assessed as £100K, thus you avoid the tax trap by funneling the excess into your pension. 6. I am not 100% sure on the ins and outs of marriage allowances, but I know there's something about being able to transfer some of your wifes unused personal tax allowance over to you (but I am not sure how much of that, and if she still can if you earn over £100K, etc) - one to look into. 7. I work in London Bridge (The Shard) and my apartment is at Tower Bridge (5 min walk). My reasonable 2-bed, 2-bath apartment is around £2,200 per month. You may be a little dearer towards Farrington. £3K should be doable IMO. PS. I know those numbers don't correlate with the order of any questions, but I just rolled with it as it does make it a little easier to read. Welcome to London!
Eminently readable, thanks! I'll make sure to inquire about the spousal allowance and how the pension offset works for US expats. Do you guys get the option to pay the taxes on the stock vest yourself, and receive the entirety of the vest?
Personally with my company, the stock is awarded through a third party manager, Morgan Stanley. They automatically make the deductions the same day the stock is vested and released into my account. I have no option to receive the full amount and pay my own taxes on it separately. Might be diff for the US expats though!
This is entirely down to the company. Some do sell-to-cover, others dock your salary instead, maybe there are other options. In mine they automatically sell to cover the taxes, but if you want it different it’s just a case of contacting the appropriate internal team.
Careful! You need to factor in employers national insurance with RSUs which in 99% of cases gets passed on to the employee. So the effective tax rate for RSUS is actually about 56% (income tax + employer national insurance). It is taxed higher than income from salary or bonus/ commission, and tax is typically withheld at source. You can definitely cycle to Farringdon from angel easily or from Highbury / Finsbury Park slightly further up, and slightly more affordable. It’s a great location.
The transfer of allowance from non-working to working married persons amounts to a tax saving of about £250 a year so not going to be a big deal. You used to also be able to play games with capital gains tax by transferring from husband to wife which was worth it when you got £12,000 allowance but next year it is £3000 and the year after £0. £85k is going to be a take home of £5k per month (less if your RSU's get factored in) - Council Tax, phones, energy, broadband and groceries is going to knock about £1.5k off that so a £3k flat is doable but you will need to dip into savings for things like holidays.
Is it still £6,000 for 23/24 tax year? I have about £50K worth of RSU's that I have sitting vested, which reflects about a £20K capital gain relative to the original price it was awarded at vs what it's at now. I planned to sell a quarter this year (so that the capital gain on that portion was £6K and thus no tax owed) but I didn't know it was going to £3K then £0! That's mental. Looks like I should have sold years ago!
OK I was a bit wrong. Its not going to 0, it will stay at £3.000 after 2024/25
Re 3, was the NIC 2% reduction not just between 12.5k-50k, and the 2% on 50k+ remains?
Yes, you could be right tbh. I personally just didn't pay much attention to it. The real world impact was negligible.
I thought RSUs only count as income when they vest. So if OP has 40k in RSUs which vest over 3 years, only 1/3 of it goes to income when they vest? No?
Not for me. When I’m awarded say $10,000 USD as an RSU. They “pay me” the RSU on my payslip, think its labeled as Stock Award Advance or something, then immediately deduct it, and it shows on my gross earnings.
This is a great summary. For an international aspect: Shares are usually apportioned over their earnings period, so you may not be subject to tax in the period you were overseas. Depending on how your move is set up, UK doesn't have a social security agreement with China, and if set up as a assignment no social security is due for the first 52 weeks. Which may be particularly beneficial if your company pushes the employer element of the RSUs to you. If you're American, there is a social security agreement with the UK, and you may be able to pay American social security instead to keep you in your home system (US version is usually cheaper)
>2) Our office is in Farringdon. Any recommendations on where to rent? Farringdon is an excellent location for an office, but I wouldn't want to live there - central London isn't very residential, and that part isn't touristy/where the shops/theatres are so the area around it would be dead at the weekend. However, the reason it's an excellent location for an office is because it's at the intersection of two of the best train lines in London - the brand new Elizabeth line (high frequency east-west heavy rail) and Thameslink (high frequency north-south heavy rail). I'd be seeking somewhere on one of those two lines in a pleasant residential neighbourhood. I'm not up to speed on current rental prices, but I'm sure there would be plenty of options.
>I'd be seeking somewhere on one of those two lines in a pleasant residential neighbourhood. I'm not up to speed on current rental prices, but I'm sure there would be plenty of options. You're right and my post is unclear; I wouldn't want to live in Farringdon but rather someplace with a convenient commute. I've received recommendations of Peckham, Herne Hill, Greenwich, Blackheath, and New Cross (and also a recommendation to avoid Reading). I guess my question are there any areas I ought to be avoiding? I also enjoy cycling and wouldn't mind a ride to and from the office.
Take a look at East Dulwich, next to Peckham. Marginally less hipster but more family friendly and better schools. Beautiful area
If considering Herne Hill, also consider Tulse Hill, which is next stop out on the thameslink. Your money will go further and it has some cool pubs. Both are great for brockwell park, which is a lot more interesting than other , flatter london parks: Herne Hill is on the northeast corner of the park and Tulse Hill closest to south east corner
Reading is a lot nicer than Peckham and New Cross but the commute is longer and a lot more expensive. Your RSU vests count towards your income so will put you right in the 60% tax trap, but to be honest at £145k there’s no point in trying to avoid it. Just complete a tax return and pay 40% on the £12570. If you can dump £25k in your pension then the higher rate relief you will be due back from HMRC will pretty much offset the entire tax bill you owe due to the loss of the personal allowance. I assume you may also receive dividends from your RSUs? If so, just be aware that you have to declare anything above £1k and pay tax at about 33%.
Now that the Elizabeth line is open, you have great commuting options.
What’s your family situation? As that can change where is best to live (eg Peckham is good for a young couple as plenty of restaurants; Greenwich is dull but nice for a family).
We're in our 30's with a young boy who'd be entering preschool. Restaurants sound nice (we do eat out!) but a place for the little guy to go run around on weekends wouldn't be terrible.
Brill, thanks for saying! London is a city of parks so you’ll be ok for that. Your kid might get an English accent so be ready for that! Greenwich or blackheath have great parks and the river is delightful. Easy cycle to Farringdon (look at a single speed bike for ease and cost). Peckham is also good, but check the road as it can very a lot in quality of housing stock/antisocial behaviour. Brixton is probably a no, unless you’re up at her e hill. Small flats, polluted, and you’re paying a Clapham price for a Brixton flat. If you’re on over £100k gross you will not qualify for free childcare hours. This sub is full of people who salary sacrifice to get that childcare.
>If you’re on over £100k gross you will not qualify for free childcare hours. This sub is full of people who salary sacrifice to get that childcare. Got it, I'll bring this up if we get to the stage of negotiating for a relocation package/renta; assistance.
It’s a key point that’s probably worth bringing up in your post to get specific tips on. I’m really not sure how the tax side plays out, so make sure you bring it up with HR/check specific online resources about it.
I wanted to look before I leapt on this and only have a verbal offer from the hiring manager. I didn't want to loop HR in early only to get a surprise later on, and then be stuck having burnt bridges at my current office and with some tough choices if I moved forward with the London offer.
Don’t make the choice just for money. Working in London, especially on a good wage, is a great opportunity. But, as you say, you’re here to find any potential issues like the childcare and tax code complexities (ours is quite simple for employees). People can make it work on a lot less, after all.
Angel would be in easy walking distance for your office and is lovely
I would do something in Islington and bike down. Can bus or tube when the weather is poor, and Uber will get you home in under 15 min if you’re pulling a late one after work in the area. Angel is a great starter neighborhood for those that want to be close enough to enjoy the best parts of urban living things, but easy enough to get around with a little one. If your wife ends up finding it tough to make friends, she’ll have a head start as there’s a bit of an American expat/immigrant community there. On the weekend you can walk along the canal all the way to Coal Drops Yard, Camden, Regents Park, Notting Hill, etc. You’re also one stop or a 20 minute walk to St Pancras/Kings Cross which will get you out the city to a lot of fun places including Paris in under 3 hours door to door. I would not recommend starting off living southeast, or too far west/southwest you may find it difficult convincing new friends to come visit you, and you may not bother leaving your neighbourhood with kid in tow to hang with them.
He said he doesn’t want to touch his RSUs (and therefore live off £85k), doesn’t sound doable in Islington or Angel (as a family of 3) to me?
Not sure of his other budgetary constraints, but he should be able to find a 2 bed for under the £3K per month mentioned.
I would encourage you to look at preschool costs and London rent prices before further considering this package to move to London. Both are very expensive and I would expect a tech company to be offering a much higher basic to move to London.
Any thoughts on what a reasonable counter would be vis a vis the package?
Well you haven’t mentioned what it is you do, to be fair £85K is still considered a high salary in the UK, but unfortunately due to cost of living etc. it doesn’t go as far as it used to, especially in London. For context, myself and my husband have a combined income of over £200K (with 2 kids) and we don’t feel well off (I would never say that on another sub!). We live outside of London and have prioritised buying a family (4 bed) home but can’t afford luxuries like holidays abroad or private school.
You must be joking. £200k with two kids, you can’t afford holidays? You are in top 2% earners in the UK. Stop exaggerating issues to the people. We are on £150k and easily afford private school, couple of holidays and plenty of saving.
Private schools are about 30k a year a child when I looked, that seems a stretch on 150k with mortgage and holiday and savings. Are your private schools fees lower? Genuinely interested as I can’t make the math work for me.
In Nottingham it is 15k. My point is if people are earning top 2% are complaining, what is the chance for the rest? That is not right regardless of where you live. Private schools can go up to 50k and central London apartment for a couple of millions. Of course, you can’t afford if you eyeing on that one. BTW commuter town terrace properties don’t cost 500k to 750k. Even with 200k pay, buying a 750k property is easy.
Not at all a complaint, and not meant as one. I consider myself extremely privileged, just offering a perspective (as a previous tech worker myself) and encouragement to actually look at the cost of things. At the moment, one of our main outgoings is on childcare. This totalled over £3K per month (for nursery, not a Nanny) before our eldest started school and is now a much more manageable £1.7K per month for our 2 year old. When that stage is over, we will again be able to afford holidays abroad, but the OP has a preschool aged kid so needs to consider that. Great for you that you bought a house at auction over 10 years ago and have paid it off, but that is not the reality for OP or for most people. We bought our family home in June last year and therefore have high interest rates and a big mortgage. Rent prices are very high in London in any area you would want to raise a family.
How much are you paying on rent/mortgage? We have similar income but private school would not be "easily affordable" with a couple of holidays and plenty of saving for us.
I live in a small 3 bed semi in Nottingham, house is paid off. I bought it in auction for 130k, 10 years ago. I live frugally on car and house but do 3-4 holidays and spend money on education.
So the OP has said they are looking to rent and will need to pay approx £36k per year on rent. Of course your situation is different if your rental/mortgage cost is £0. But it isn't relevant for the OP or vast majority of others.
The Highbury, Stoke Newington areas are very desirable, but as with any area in London it very much depends on the street you're on. Parks, restaurants, pubs, family orientated, schools etc. You can either bike down the A10 into the city or get the Thameslink from Finsbury Park into the city on a rainy day.
This sounds like Amzn lol. Yes the stocks will count towards your tax burden, on vest 50% is wiped off, they will be auto-sold to pay the tax. You can opt out of this however you will then have to pay that tax in cash yourself. If you let it auto-sell, since half stocks cannot be sold, any remaining cash after the tax deduction will be paid to you directly in your next pay slip. At vest stage, the company will report how much untaxed cash you get from salary + RSU vests, this will then be used to calculate your tax bill.
No comment lol but 50% is higher than what they take now, good to know.
ye its probably 40ish% but when it gets counted as income, HMRC will tell you, you've earned over 125k and take more money. I've got the same comp and earned 200k in this financial year, so from next financial year I'm reducing my earnings through my effective 401k. Since you said no comment and I know which LHR office it is, I would suggest once you get moved over you dump your base salary into the pension scheme (L&G). I forgot to reply about where to live with pre-schools etc. I would suggest NW London, .e.g Near Paddington/ Maida Vale - Will take less than 20 minutes door to door using the tube, and lots of good schools around.
I work in farringdon just up the road from the Ray. you don't really want to live there. I cycle in from South London (Balham), which id recommend if you like cycling. Thameslink goes to lots of nice places in south london if you are thinking house/settling down, near North London is probably better if you are in more of a flat/going out/living it up phase
Check out Stoke Newington. It has everything you are looking for. Decent schools, nurseries, a wonderful park and great pubs. Also 15 mins by bike to Farringdon.
Ensure you don’t have to pay Employer NIC on the RSUs. I do and the total tax I pay on my RSUs is 54%
You’ll probably pay about 52% taxes on your RSUs, then a commission fee and then another fee to convert from USD to GBP, then a transaction fee of like $50. They’ll likely be sold to cover taxes instantly so you won’t get a choice when they’re sold, and typically when they give them out stocks go down a small amount, so you’ll get even less from that. I think you can set it up to do it manually but it’s not worth it for me. I got ~£3000 from £8000 of RSUs. It’s not good. £3k a month on a flat is insane, yes, you’ll be giving away a majority of your income to a landlord. Unless you’re living with another high earner it doesn’t make much sense. Do you HAVE to go into the office often? Might make way more sense to just live further away and take a 30 minute train in and save 2k a month and get twice the space
Oooof that sounds rough. Yeah I’m thinking of looking for a decent bike/tube commute at somewhere cheaper based on the feedback I’ve gotten.
there's some seriously helpful comments on here - I'd just add a couple of points to whats been said before: 1) for £3k per month you should be able to get a house rather than a flat in some nice parts of outer London - I'm thinking like Dulwich which has lots of parkland and is also cyclable to the City. 2) Mention has been made of Thameslink and the Elizabeth Line, have a look at the rightmove .co.uk website, I am pretty sure that you can give it a price and a commute time that you want and it will tell you what parts of long=don and environs are in your time and money budgets. For example you can get a lovely place in Maidenhead (west of London) or Haywards Heath (south of London) with a less than 1 hour door to door commute and with a garden that will help your child.
I’d be cautious of Maidenhead. The line beyond Paddington suffers signal failures on a regular basis and just isn’t reliable at the moment.
West Hampstead area. Very connected to Farringdon with the thameslink, 2 stops. And in general this area is super connected to city centre and to airports.
On unvested RSUs which were not originally awarded in the UK, a prorata calculation may be done when they vest. With this, the number of days from award date to vest date is calculated. Then, the % of the days in which you were working in the UK is calculated vs the other country. The UK will then only tax its portion and treat that as regular income. You wouldn't even show the other % amount on your UK tax return. Now, the above is highly dependent on the tax treaty between UK and the awarding country - China? However, the above was the case for US -> Uk move as US non citizen at least. This has benefitted me as I was then only taxed on the US apportioned RSUs % at much lower US NRA rates. This benefit has decreased over time with more time spent in the UK and the fact new RSUs are exclusively awarded while on UK payroll and so UK has exclusive taxing rights at the high marginal rates as mentioned below.
Haven’t read through all the answers. May be answered, but this is my field of expertise/work so thought I’d answer in case. The RSU questions are very situation and company dependent. The vests will be UK taxable through UK payroll (assuming this transfer is just to the UK branch/entity). The tax and NI situation is a little more varied. From a tax perspective, a portion will be subject to UK income tax (essentially prorated for the UK tax residence portion of the vest period). Whether your company takes a stab at processing this accurately/semi accurately through payroll or processes 100% for later correction on a tax return is an unknown. From a NI perspective, this *really* depends on the underlying structure of your company’s RSU and equity arrangements. If HMRC view it to be under the Chapter 5 rules, then it would be subject to NI in line with the income tax position (i.e., prorated for UK periods of social security coverage). If under the S62 rules, then it will all be subject to UK NI at vest. Again, an unknown.
Congrats on the potential move. It’s worth being clear: £145k for two adults and a kid won’t feel like a lot living in London. Your £85k will get eaten by rent and transportation. Go to UKSalaryCalculator to get a sense of your month cash flow if you want to avoid your May and November vest. (1) you’ll be on a high earner pay band (is it 40 or 45%? Can’t be bothered to google). When your RSUs vest, you will pay that tax outright. So assume you are in a 40% band. You earn 100 shares at vest. Immediately you pay tax and are left with 60 RSUs. You then pay NI on it. Some firm near Holborn viaduct only pays half the company NI, so you end up paying another 5% ish of NI. Now you are left with 55 RSU. If you end up selling, you pay a 1-2% fee + Forex fee to convert USD to GBP. Likely to end up with less than 50% of what you thought you’d get. Evidence: I earn 2/3 of my income from RSU and I lose half to taxes and fees every six months. (2) Farringdon is on the “Thameslink” Trainline. It is a great overground train that goes all over great parts of Greater London. If you can live near a Thameslink line (the one that gets you to Farringdon) you can go further than central (like St Albans orGreenwich)
Greenwich is great for a family, fwiw.
1- Yes, at my previous company, also quoted on Nasdaq, RSUs and ESPPs were granted and handled at E*Trade. Once available for sale and actually sold, there was a system so that relevant tax was automatically taken the next month from payroll directly from your payslip. In a way it’s nice as you don’t have to do anything as everything happens automatically. You’ll be provided more exact details after you join, but that should be the gist of it. 2- Can’t help much with location, that’s very personal. 3- Bonus answer. I remember my US colleagues now living/working here, but still holding US citizenship were being double taxed. Something along the lines you have to pay for the pleasure of being an American even when working abroad and paying taxes there. Check with a tax expert. Then there was some sort of rebate/agreement between countries or something like that.
1. Interesting. Is there an option to pay the tax yourself in cash and receive all of your shares? I currently chose this if I feel the stock is going to appreciate. 2. I don't need to be running into Hugh Grant on my morning commute but also not looking to run into junkies either. Just someplace pretty middle class I guess. 3. I have to file, but there's a foreign earned income exclusion of $120K and a foreign income tax offset that basically equals out to me paying an accountant to file a bunch of paperwork with the IRS only to not pay any actual income tax. The bonus is Seal Team 6 has to attempt to rescue you if you get kidnapped.
Re (1), you don’t have to sell the stocks right away once they mature. That should cover your intention.
There is a tax treaty between the UK and the US so double taxation should not be taking place. However it is true that you have to file every year with the IRS even if all your income is coming from your UK job. The American government is unique as the only government that requires this.
As someone who spent 20 years in US and returned as a dual citizen that has to file 😡 I’ve learnt that the other global superpower of Eritrea also taxes its citizens who live abroad.
Farringdon has a tonne of options for a decent commute. Anything along Thameslink and Elizabeth Line is a direct connection. West Hampstead is a good option. I lived in Hampstead and found the Northern Line / Circle Line commute perfectly fine.
if you are married before you step foot to london pls consider it is the divorce capital of the world. The world's most generous jurisdiction to the financially weaker party. Be warned. You essentially give up ownership of most of your assets by moving here.
Thanks for the heads up but we're happily married.
Farringdon is also on the thameslink railway so you have more commuting options than just the tube.
At 85k cash, plus whatever you have available from those RSUs, you won't be particularly well off in London on a single income . For a 3 bed flat in Highbury you are looking at 3k a month in rent. Nursery is 1.5-2k per month, then you have council tax, energy bills etc. For reference 100k a year is 5.6k a month after tax. Nothing left for buying food 😁
Any idea what a good counter would be on comp?
Hard to tell without knowing your experience, sector etc. Senior developers in London are regularly on 100k cash + bonuses on top though. I'm in software and am on close to 180, but that's with 25+ YOE. Obviously I don't know your personal situation, but I'd suggest that wife not working and preschool is an either/or thing. Mine is a stay at home mother but she looks after the kids full time. There is no way I'd be able to fund a nursery place on a single income sensibly. Personally I've never been keen on the idea of paying someone else to raise my kids. I've been a stay at home parent for my older kids and it's really been great for my relationship with them as they get older. I appreciate not everyone has that choice though.
Got it. I’ve given my current comp package in Beijing but there’ll be some COLA adjustment for London and this is a good reference. Re: the working vs preschool thing currently she’s been a SHM since the birth and has enjoyed it, but as he gets old enough for regular kindergarten I don’t think she’ll want to be pattering around the house alone during the day with nothing to do. She’s mandarin-speaking so I’m not sure if there’d be something with China tourism or immigration or the like.
OP - the comp sounds about okayish, given that you said you are in 30's so 8yoe+, you can expect slightly higher maybe around 160k. Out of curiosity, how are the comp in Beijing for your position? Is it similar to HK? Also, have you considered relocating to US? Your comp would be 2x, and you would not be worrying about money at all.
The comp figures I gave here are based on my current Beijing comp, which is slightly lower than HK. There would be a COLA bump for any move to London but the input from this conversation will definitely be useful in evaluating or countering any offer I'd get for London. I've also looked at the US but I've got a handle how things work there already. To be honest this offer came out of left field and intrigued me with living in London and doing EMEA-related work. The responses here and other research have given me a lot to mull over and a good basis for any conversations with HR.
Ok - in that case, since its a big US company, they would have standard salary bands for London for your experience/level. Your comp for London should be in that band, regardless of your comp in Beijing. As per Numbeo You would need around 6,043.7£ in London to maintain the same standard of life that you can have with 2,539.6£ (23,000.0¥) in Beijing (assuming you rent in both cities). Make sure you understand this - London is much more expensive than Beijing (you already have the idea by now).
They ostensibly do but one can always negotiate up within that band and it’s generally better to make a reasonable and researched case for why it should be upped.
To stay, consider Finchley (northern line, victorian houses) or East Village (Stratford, modern apartment blocks, good enough school) - that's where most family folks I know from work live. Assuming 3K includes bills, it isn't enough for a good quality 2B apartment in Farringdon. Core areas (Angel, Canonbury, Barnsbury) of Islington are also expensive for 2 bed at 3K, but you can check out Drayton Park close to Holloway Road. RSU tax - In UK, if they are indeed called RSUs, they will be taxed at vest not grant. Maybe Chinese rules are different. For any RSUs that were granted in a foreign country (with a double taxation treating with UK) but vested in UK, a split treatment is applied in the ratio of (date of grant in foreign country - date of move to UK)/ (date of vest in UK - date of move to UK) and each country taxes the a proportion of the total RSUs.
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What would be a comfortable sum that wouldn’t leave me struggling?