If you work in tech or a global company, RSUs and ESPPs can form a valuable part of your overall package.
Getting the right financial advice for RSUs and ESPPs in the UK is important because while they look great on paper, in practice they often raise a lot of questions.
We provide specialist RSU and ESPP financial advice across the UK, helping you manage tax, reduce risk and build long-term wealth.
RSUs (Restricted Stock Units) and ESPPs (Employee Stock Purchase Plans) are both ways of receiving shares from your employer.
RSUs are typically awarded and vest over time, while ESPPs allow you to buy shares, often at a discount.
They can be valuable — but they’re taxed differently and can quickly become a significant part of your overall wealth.
Common Mistakes We See with RSUs and ESPPs
A lot of people we speak to have or are building up shares through their employer, but haven’t had a chance to step back and look at the bigger picture.
Some of the most common errors we see are:
Understanding Your Position
We start by looking at your income, tax position, share package and wider finances. This helps us understand how your shares work and how they fit into your personal financial situation.
Putting a Clear Plan in Place
Once we understand your situation, we help you make sense of your shares. This includes guidance on whether to hold or sell, helping ensure you’re not too heavily exposed to a single company.
Managing the Tax Side
We help you understand how RSUs and ESPPs are taxed and how decisions impact your overall tax position, particularly around higher income levels.
Turning Shares Into Long-Term Wealth
We help you move from holding shares to building a more balanced plan using ISAs, pensions and other diversified investments.
Let’s say you receive £30,000 of RSUs each year, vesting over a four-year period.
Depending on your income and overall position, there may be certain years where it makes sense to sell some of those shares and reallocate the proceeds — for example into pensions, ISAs or a different investment portfolio.
Without a clear plan, it’s easy to hold onto everything and end up overly reliant on one company’s performance, while also potentially building up a larger tax bill when you eventually come to sell.
With a plan in place, we can use financial modelling to show how different decisions, such as selling shares and reinvesting elsewhere, could look over time.
The right approach will depend on your situation, including your income, how your shares are structured, and your longer-term plans such as retirement.
This is particularly relevant if you:
– Receive RSUs or ESPPs
– Earn £100,000+
– Have a large portion of wealth in company shares
– Want to reduce tax and risk
– Want a clearer plan with your shares
Here’s what one of our clients had to say about their experience working with us:
“My search for a financial planner with expertise in Restricted Stock Units (RSUs) and Employee Stock Purchase Programs (ESPPs) led me to Matt at Momentum Wealth. His talent for simplifying complex financial planning is remarkable, and the advice he’s provided has given me dramatically increased confidence in reaching my goal of retiring at 55.”
If you are thinking seriously about your shares and want the same level of clarity and reassurance, we’re here to help.
When your RSUs vest, the value of the shares is treated as income, similar to your salary so you’ll typically pay income tax and employee National Insurance. Employer National Insurance also applies at vesting, and some companies pass this on to shareholders by withholding additional shares.
To cover the tax, your employer will usually sell some of your shares automatically. This is known as “sell to cover” and is typically done through your share platform, for example, E*TRADE or Merrill Lynch. The amount sold to cover taxes is based on an estimated tax rate, often aligned to your marginal income tax band, however it may not fully match your final tax position.
Because the value of RSUs is added to your income in the year they vest, it can push you into higher tax bands or reduce your personal allowance if your total adjusted net income goes above £100k.
Then once your shares have vested, you own them outright. If you choose to keep them and the value increases, any gain from the vesting price to the eventual sale price may be subject to Capital Gains Tax, depending on your allowances.
There isn’t a one-size-fits-all answer, but many people sell at least some shares on vesting for two reasons:
ESPPs can be slightly more complex, but like RSUs there are usually two parts to the tax.
When you buy shares at a discount, part of that discount is treated as income and may be subject to income tax and National Insurance. Once you own the shares, any increase in value from the purchase price to when you sell may be subject to Capital Gains Tax, depending on your allowances.
You may also come across terms like “qualifying” and “non-qualifying” disposals, particularly with US-based plans. These relate to how long you hold the shares before selling, which can affect how the income and gains are calculated.
You can’t avoid income tax on vesting, but you can manage what happens next by using Capital Gains allowances, spreading sales across tax years and using ISAs or pensions to reclaim income tax.
Planning the timing of sales and what you do with your share proceeds can help you stay within certain tax bands and avoid pushing more of your gains into higher rates unnecessarily.
