For senior earners, the band between £100,000 and £125,140 is one of the most punishing in the UK tax system. A little sequencing goes a long way.
For senior earners, the stretch of income between £100,000 and £125,140 is one of the most punishing bands in the UK tax system. As income rises through it, the personal allowance is withdrawn, producing an effective marginal rate of around 60% on that slice. Add vesting share awards on top and it is easy to drift into the band without noticing.
Restricted stock units are taxed as income when they vest, at their full value on the day. A strong year for the share price can push total income well into the taper zone, or beyond it, in a single event that was never really planned around.
Pension contributions and salary sacrifice reduce adjusted net income, and used deliberately they can bring income back below the threshold where the allowance is lost. The timing of when awards are sold, the use of both spouses' allowances, and filling ISA and pension capacity each year all matter. None of this is exotic. It is sequencing, done on purpose rather than by accident.
The tax system rewards those who plan around vesting dates rather than after them. For an executive with a meaningful equity component, a short annual review of what is vesting, when, and what to do around it is usually worth many times its cost.