What happens to your RSUs after redundancy in the UK?

An announcement of redundancies can put several dates into question at once: your final working day, the end of your salary and the next vest of employer shares.

There is no single rule that determines what happens to every RSU award. Shares already delivered to you are generally different from awards that remain conditional. Unvested restricted stock units, or RSUs, may be forfeited when employment ends, but the plan rules and any agreed departure terms determine the position.

For an American working in London, the practical task is to establish what you will retain, when you could access it and what it leaves available while you consider the next role. Salary and expected equity proceeds may be changing together.

Establish what you own and what remains conditional

An RSU is generally a promise to deliver shares or cash once specified conditions are met. It is different from owning shares outright. Fidelity’s explanation of RSUs describes the distinction between an award and its eventual delivery.

Start with a grant-by-grant record. For each award, identify what has vested, what has been delivered, what remains conditional and the next scheduled vesting date. Different grants can have different terms.

Shares already delivered are usually yours to retain, subject to any applicable repurchase, clawback or other restrictions. A portal entry marked “vested” needs closer attention if settlement, the delivery of shares or cash, has not yet happened.

Next, establish whether the shares can be sold. Ownership may still be subject to trading restrictions, company approval or the availability of a buyer. If the business is private, ask whether former employees can participate in a proposed share-sale programme. A headline valuation does not establish accessible proceeds.

Put the award terms beside the departure timetable

Gather the equity plan, individual award agreements and any amendments or UK supplement. Add the vesting schedule, employment contract and proposed redundancy, severance or settlement documents. Include any relocation or assignment agreement relevant to the departure.

Ask HR and the stock-plan administrator to confirm which clause determines when vesting stops for each grant. Your last working day, employment end date and vesting cut-off may differ.

Some plans exclude notice periods, garden leave or pay in lieu of notice from the service that counts towards vesting. Others provide exceptions or continued vesting in particular circumstances. This published employer agreement, for example, contains specific termination and notice provisions. It illustrates why the actual wording matters; it does not establish your entitlement or the legal effect of your own terms.

Put each upcoming vest beside the proposed dates. Ask what happens during consultation, worked notice and garden leave, and whether an internal transfer would preserve the award. If continued or accelerated vesting is proposed, ask for the affected grants, amounts and conditions in writing.

Read the equity provisions with the rest of the package

An attractive total severance figure can conceal different payment dates and conditions. Separate salary, notice pay, bonus, redundancy compensation and any cash replacing equity. Establish what survives, when payment or delivery is due and which rights you would give up.

Have the equity provisions reviewed alongside any settlement agreement. Acas explains that independent advice is required before signing for a statutory settlement agreement to be legally valid. Ask the adviser to address the share awards explicitly, including any discrepancy between the award rules and the proposed departure terms.

Before work email access closes, arrange independent access to the stock-plan account and retain the award, transaction and tax records you are entitled to keep.

Check the amount available after tax

RSUs can create UK employment income when shares are received at vesting. A later sale can have capital gains consequences.

US citizens generally remain subject to US tax on worldwide income. Ask your UK and US tax advisers to coordinate the position, particularly if you worked in both countries during the award period. Do not assume payroll withholding settles the final liability.

Record anticipated proceeds after tax and costs, with their expected dates and any remaining conditions. Keep a possible future vest or share sale separate from money already accessible.

Work out how much time the confirmed resources provide

Use your household financial plan to build a monthly forecast from accessible cash, your partner’s income and confirmed departure payments when due. Reserve for known tax liabilities, then test a longer job search, lower pay in a new role or a delayed share sale.

For illustration, a household has £120,000 of accessible cash after reserving known tax liabilities. Spending is £12,000 a month and a partner brings home £5,000. If the other salary stops, the £7,000 monthly shortfall gives roughly 17 months of cover before exceptional costs, assuming those figures stay unchanged.

An expected £80,000 share sale should not extend that period until access and net proceeds are established. It can be shown separately as a conditional scenario.

The forecast helps you assess how long you can look for the right role, what level of pay you need and which commitments would reduce that flexibility. It also shows which information to resolve before negotiating or signing departure terms.

Start with the award documents and proposed dates. Establish the rights you retain and the cash you can rely on, then use those facts to assess the next career move.

This article provides general information, not individual employment, investment or tax advice. Award treatment depends on the terms and circumstances. Obtain appropriate employment and UK–US tax advice before acting. The household example is hypothetical.

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