Your RSUs have vested. What happens now?

You are in one of two immediate practical positions: either shares have just been transferred into your plan account, or a vesting date is imminent and you need to decide what to do next. Receiving shares can be genuinely valuable: a tranche of 250 shares at a market price of £25 would be worth £6,250 before tax, and a larger award of 1,000 shares at £40 each would be £40,000 before any deductions. That value creates decisions about Income Tax, National Insurance, portfolio concentration and short-term cash needs. Broadly, your options are to keep your shares, to sell them, or to sell a proportion and retain the rest. There is no single correct answer; the right route depends on your personal goals, your appetite for risk and how much of your net worth is already tied to the same employer. Over the sections that follow I will explain the mechanics of RSUs, the common tax sequence that often arises in 2026/27, a practical checklist you can use in the next 24–72 hours, and the questions to ask before making a decision.

What are Restricted Stock Units?

Restricted Stock Units, commonly shortened to RSUs, are a promise from your employer to transfer company shares or sometimes a cash equivalent once specified conditions are met. The initial date when the company grants the award is the grant date; at that point you receive a contractual promise, not share ownership. You only become entitled to the shares on the vesting date, which is when conditions such as time served or performance targets have been satisfied. RSUs differ from employee share options because you do not usually need to pay an exercise price; you simply receive the shares subject to the scheme terms. Importantly, RSUs are generally not one of HMRC’s tax-advantaged UK employee share schemes such as EMI, SAYE or SIP, which means they are ordinarily treated as employment income when acquired rather than benefiting from scheme-specific tax reliefs. If you want the official HMRC context on the different schemes, consult the HMRC employee share schemes overview to check whether your award sits inside or outside those tax-advantaged rules.

How does RSU vesting work?

Vesting is the moment when contractual conditions are satisfied and you become entitled to receive shares. Two dates matter: the grant date, when the award is made, and the vesting date, when you acquire the shares. Vesting schedules differ across employers: time-based plans might vest 25% per year over four years, so 1,000 RSUs would typically vest as 250 shares per year; performance-based vesting ties awards to company, team or individual targets; cliff vesting delivers all shares at once after a set period; graded or staggered vesting releases shares in tranches, which is common in technology equity plans. Share price risk is real: if the share price is £10 at grant and £30 at vesting the value has tripled; if it falls to £6 you have less value than expected. Because rules vary, always check your individual award agreement for precise definitions of what triggers vesting, the treatment of dividends, and any time-based or performance catch-ups. That agreement will also confirm whether your award is settled in actual shares or in a cash equivalent, which changes the way taxes and brokerage processes are handled.

What happens when RSUs vest?

When your RSUs vest the usual sequence is: first, the vesting conditions are satisfied; second, you become entitled to shares or a cash equivalent; third, the value you receive is commonly treated as employment income; fourth, your employer or plan administrator may operate a sell-to-cover or net settlement where they sell enough shares to meet Income Tax and National Insurance obligations; and fifth, any remaining shares are transferred to your brokerage or plan account. Sell-to-cover is a practical mechanism: for example, if 250 shares vest at £20 each you have gross value of £5,000 and the plan may sell 20–40% to cover PAYE obligations, depending on your marginal rate and NI position. That sale does not necessarily settle every tax or reporting obligation. You should inspect the vesting statement, the payslip showing the taxable amount, and the brokerage transaction records to confirm how much tax and NI were deducted and whether any further reporting is required. For employers’ obligations on reporting employment-related securities, you can review the HMRC employment-related securities guidance.

How are RSUs taxed in the UK?

Tax treatment of RSUs depends on your award terms, employer arrangements, your residency history and personal circumstances; I will keep this high level and practical for 2026/27. RSUs will commonly give rise to an Income Tax and National Insurance liability when the shares are acquired, often at vesting, although the precise timing and treatment depend on the scheme and individual circumstances. Employers should normally provide the taxable amount via PAYE and may account for employee and employer NI, described in HMRC’s HS305 guidance; see the HS305 guidance for details. If you keep the shares and sell them later, Capital Gains Tax may apply to any increase in value above the acquisition cost, not to the full sale proceeds; amounts treated as employment income at acquisition may be used as the allowable cost for CGT purposes to avoid double taxation. Share identification and pooling rules can complicate the calculation when you have multiple awards or purchases in the same company, and cross-border vesting or foreign-currency settlement often requires specialist advice. For an overview of CGT on shares, see Capital Gains Tax on shares.

Should I sell my RSUs or keep them?

You have three neutral choices: sell, keep, or sell some and keep some. Option 1, sell, may suit if you have immediate goals such as a house deposit, school fees, or high-interest debt; selling converts equity into cash you can allocate to short-term priorities and removes further share-price and currency risk. Option 2, keep, may suit if you are comfortable with concentration risk, the holding is a small share of your total wealth, and you have a long investment horizon; bear in mind that choosing to retain shares is an active investment decision equivalent to buying those shares with cash today. A useful test is this: if you received the same value in cash right now, would you choose to spend it on buying more of the employer’s shares? If the honest answer is no, it is worth reflecting on why you would keep the shares instead. Option 3, sell some and keep some, can release cash for immediate needs, reduce concentration while preserving upside, and allow you to rebalance over time; the right percentage to sell or keep depends entirely on your objectives, tax position and attitude to risk. Each choice has tax and reporting consequences, so consider them against your broader financial plan before acting.

The risk of having too much invested in your employer

Concentration risk is the vulnerability of having a large proportion of your net worth linked to one company. Many employees rely on the same employer for salary, annual bonus, employer pension contributions, career progression and future RSU awards, while simultaneously holding previously vested shares; if the company encounters trouble that combination can hit both your income and invested wealth at once. For example, if you receive annual RSU tranches that now represent 30–50% of your investable assets, a 40% fall in the share price would materially reduce your net worth and could coincide with job insecurity. The aim is not to discourage ownership of company shares, but to encourage you to quantify how much of your wealth is effectively tied to the same employer and to weigh that against your risk appetite. Practical strategies might include diversifying through regular partial sales, directing proceeds into an ISA or a General Investment Account, or increasing pension contributions; if you want to explore rebalancing or diversification in more detail, our portfolio management service outlines typical approaches at Humboldt Financial portfolio management.

How RSUs fit into your wider financial plan

Deciding what to do with RSUs is best approached by first identifying the specific purpose for the money. Consider short-term cash needs and emergency savings, aiming for three to six months of essential expenses in an accessible account; high-interest debts such as credit cards; mortgage priorities including overpayments or offsetting; pension contributions taking account of the annual allowance of £60,000 for 2026/27; and ISA planning where the annual subscription limit is £20,000 for 2026/27. If proceeds exceed your ISA allowance you can use a General Investment Account, remembering that investments carry risk: their value can fall as well as rise and you may get back less than you invest. Other considerations include expected future RSU awards and vesting dates, family commitments such as school fees, planned house purchases, retirement timing with pension access at 55 now, rising to 57 from 6 April 2028, and estate planning. Shares acquired through RSUs generally cannot be transferred directly into an ISA; the usual route is to sell and subscribe cash within the annual allowance, and you can read about practical saving and investing options at Humboldt Financial savings and investments, and tax or estate planning at Humboldt Financial tax and estate planning.

What happens to RSUs if you leave your employer?

Outcomes on leaving depend entirely on your award’s scheme rules and the reason for departure. Unvested RSUs may lapse on leaving, but they may also be preserved or pro-rated under ‘good leaver’ provisions if you depart for reasons such as retirement, redundancy, ill health or death; conversely ‘bad leaver’ provisions, often tied to dismissal for misconduct, may result in forfeiture of unvested awards and sometimes recently vested shares. Some plans allow accelerated vesting on events like a takeover or listing, or provide pro-rata vesting for the portion of the service period completed. Vested shares typically remain yours, subject to any scheme-specific restrictions such as transfer windows or insider trading rules. Because outcomes vary so widely, review your award documentation before handing in notice if you can, and ask HR or the plan administrator for written confirmation of leaver provisions and any corporate-event triggers that could affect outstanding awards.

Common RSU mistakes

There are recurring errors I see when people receive RSUs. First, assuming RSUs are tax-free because you did not buy shares. Second, assuming a sell-to-cover or net settlement resolves every tax or reporting obligation without checking payslips and P60s. Third, failing to keep vesting statements, payslips and brokerage records for future CGT calculations. Fourth, confusing the employment income value at acquisition with the CGT acquisition cost; they are related but distinct. Fifth, holding shares by default rather than making an active decision; default retention can lead to unwanted concentration. Sixth, allowing one company to dominate wealth without quantifying the exposure. Seventh, ignoring currency risk when shares are overseas-listed or paid in foreign currency. Eighth, selling immediately without identifying the purpose for the proceeds; define goals first. Ninth, forgetting future vesting dates that may fall in different tax years and complicate planning. Tenth, neglecting to check leaver provisions before changing jobs. Recognising these traps and building simple habits, such as filing vesting statements in a dedicated folder and updating a net-worth spreadsheet, can prevent costly mistakes.

A practical RSU checklist

Use this numbered checklist when your shares vest or a vesting date approaches: 1) Find and save the award agreement and the vesting schedule, noting grant and vest dates and any performance measurements. 2) Confirm exactly how many shares vested and the per-share value on the vesting date, recording any exchange rate if shares are overseas-listed. 3) Check how Income Tax and National Insurance were handled by reviewing your vesting statement and the relevant payslip; confirm amounts reported on your P60 for the tax year. 4) Record transaction charges and any broker fees associated with sell-to-cover or subsequent sales. 5) Calculate how much of your total investable wealth is now connected to your employer; express it as a percentage. 6) Identify financial goals the money could support, such as adding to a £20,000 ISA for 2026/27, topping up a pension within the £60,000 annual allowance for 2026/27, or paying down a 5–8% credit card balance. 7) Consider the three options – sell, keep, or partial sale – against your goals and risk tolerance. 8) Review future vesting dates and potential tax implications across tax years. 9) Seek professional advice if awards are sizable, cross-border, or if you are unsure how they interact with pensions and tax rules.

When might financial advice be useful?

Professional advice is most valuable where RSUs represent a meaningful portion of your wealth or where complexity creates risk. Consider regulated financial and tax advice if your RSUs or combined holdings form a large percentage of investable assets, if several awards vest across different tax years creating overlapping tax positions, if you are a higher or additional-rate taxpayer, if shares are overseas-listed or paid in a foreign currency, if you have lived and worked internationally during the vesting period, if you are approaching or in retirement, or if you want to coordinate RSU proceeds with pension contributions and ISA planning. Advice can also help when your employer is being acquired, listed or restructured and award terms may change, or when you hold a large, concentrated position and are unsure how to reduce it sensibly over time. If your RSUs represent a significant part of your wealth, or you are unsure how they fit alongside your pensions, investments and financial goals, professional financial and tax advice can help you understand options and simulate outcomes. For a direct discussion with me, Jack Logan, see my profile at Jack Logan, Independent Financial Adviser, Humboldt Financial.

About the author

Jack Logan is an Independent Financial Adviser at Humboldt Financial. I work with employees and executives to turn employer share awards into deliberate financial plans that align with mortgage, pension and family goals. If you would like a conversation about where your RSUs sit within your wider financial picture, or a review of vesting statements and tax timing, you can find my profile and contact details at Jack Logan, Humboldt Financial.