Tax relief on UK salary income
The broker that is issuing the moneys after vesting is more than likely deducting a notional amount of tax and NI based on UK income tax laws. If you are not a UK resident, then you should pay income tax on those stock options based on your own tax residency. Best thing to do is speak directly with the broker to explain the situation, ask them to not deduct anything from your stock options - but keep in mind that you will need to declare these earnings yourself and pay the correct rate of tax. From my own personal experience, the UK employer more than likely receives the net value (after the notional tax and NI have been deducted) and in usual circumstances create a tax liability on your payslip (if you were working and had earnings). If of course this deduction is being made by the employer, then you can simply ask them to correct this (most UK payroll software will automatically deduct tax and NI for payments after leaving unless manually intervened, so they probably aren't aware if it is them doing so).
For the financial year 1 April 2014 to 31 March 2015 as you have / will be spending more than 182 days outside of India, you are Non-Resident from tax point of view. For the period 1 April 2014 to Aug 2014, any salary / income you have earned in India is taxable and tax need to be paid. For the period Aug 2014 to 31 March 2015 the income you have earned in Saudi is not taxable in India. You can transfer money to India or keep in Saudi, it has no effect on the taxes. Any interest income you earn, or rental income you earn, or any other source of income in India is taxable. You would need to file returns accordingly. An NRE Accounts allows you to transfer funds out of India without any questions. So if you intend at some point in time in future to move funds out of India [say settling down in Saudi or UK or US etc] it is advisable to have NRE account. If you are sure you don't want to transfer funds out of India, you should open an NRO account. This is more of an interesting question then it looks on first sight. In the USA there are some tax reliefs for mortgage payments, which we don’t have in the UK unless you are renting out the property with the mortgage.  So firstly work out the interest rate on each loan taking into account any tax reliefs, etc. Then you need to consider the charges for paying off a loan, for example often there is a charge if you pay off a mortgage.   These days in the UK, most mortgagees allow you to pay off at least 10% a year without hitting such a charge – but check your mortgage offer document. How interest is calculated when you make an early payment may be different between your loans – so check. Then you need to consider what will happen if you need another loan.   Some mortgages allow you to take back any overpayments, most don’t.  Re-mortgaging to increase the size of your mortgage often has high charges. Then there is the effect on your credit rating: paying more of a loan each month then you need to, often improves your credit rating. You also need to consider how interest rates may change, for example if you mortgage is a fixed rate but your car loan is not and you expect interest rates to rise, do the calculations based on what you expect interest rates to be over the length of the loans. However, normally it is best to pay off the loan with the highest interest rate first.  Reasons for penalties for paying of some loans in the UK. In the UK some short term loans (normally under 3 years) add on all the interest at the start of the loan, so you don’t save any interest if you pay of the loan quicker.    This is due to the banks having to cover their admin costs, and there being no admin charge to take out the loan. Fixed rate loans/mortgagees have penalties for overpayment, as otherwise when interest rates go down, people will change to other lenders, so making it a “one way bet” that the banks will always loose.   (I believe in the USA, the central bank will under right such loans, so the banks don’t take the risk.) "Your mortgage will not allow you to rent out the whole property - they would want you on a buy-to-let mortgage (which will have worse APR than a standard) - buy to let mortgage also invalidates help to buy schemes. The help to buy scheme does not allow you to sublet.  I.e. you cannot have tenants.  However, you can have a lodger. My understanding is that they are different.  In the UK, you can make up to £7500 tax free from a lodger under the ""rent a room relief"" and as this isn't a tenant - this should be ok with both help to buy and the mortgage provider.  However I would recommend double checking with your mortgage provider - as if you break any terms and conditions, it could lead to invalidating your mortgage. Another thing to consider with lodgers (or tenants) - it generally makes insurance a LOT more expensive and wont cover you if the lodger steals your stuff or damages the property and this will include lodgers friends if they visit - so just something to bear in mind." A combination of market research and tax law would likely be the combination used to set the salary. An elaboration of each: Taxes - In Canada and the US there can be differences in how payments are treated if they are salary,e.g. payroll taxes such as CPP, Social Security and others may apply in this case as well as personal income tax rates, or dividends, which may have different treatments in some jurisdictions I believe. If salary above $250,000 is taxed at 40% and dividends are taxed at 15%, which rate would you rather pay? (This is hypothetical as no jurisdiction has been noted here yet.) Most provinces and states in North America will tax the first few dollars at rather low rates and so it isn't bad to take a nominal rate of $1 or so in salary as usually the higher rates exist for higher salaries. Executive Compensation has come under scrutiny in recent years though it is usually a mix of salary, bonuses, and stock either restricted or options. Market Research - Some companies may research what other small public companies would pay executives as the salary may have to be approved by a board of directors in some cases. At least this would be how I remember things being decided in small companies I worked for in Washington State and the province of Alberta. In a lot of company cases, excess earnings are stored and if there is enough of a pile then a special dividend may be given out though some corporate structures like REITs force dividends to maintain their tax status. Note the payment in dividend here requires that the President be able to dictate what happens with the cash in the bank of a company which isn't going to be the case for the regular employee. Also, the dividends here would go to all the shareholders and thus if there are people besides the President owning shares they would also get their portion based on what they own. The HMRC website would explain it better to you. There is a lot of factors and conditions involved, so refer to the HMRC website for clarification. If your question had more details, it could have been easy to pinpoint the exact answer. Do I declare the value of shares as income Why would you do that ? You haven't generated income from that yet(sold it to make a profit/loss), so how can that be declared as income. "I'm answering my own question because in some sense, I alone know the answer. After the review, HMRC decided to waive all penalties (including the initial £100 penalty for late filing, which I had not appealed against) because ""HMRC may not have informed me"" about the mounting penalties. I had pretty good evidence that they hadn't informed me as there was a software change and immediately after that I got an initial penalty notice followed a day or so later by the further penalty notice.  But I am happy with the outcome, I wasn't going to argue any further!" Yes, you can deduct from your taxable profits (almost) any expenses incurred in the course of your business. See here for HMRC's detailed advice on the subject. The fact that you have salaried PAYE employment as well makes no difference. Depending on how much freelance work we're talking about you could set up a limited company, with you and your wife as directors. By invoicing all your work through the limited company (which could have many other benefits for you, an accountant/advisor would... well, advise...) it's the company earning the money, not you or her personally. You can then pay your wife up to £10,000 per year (as of writing this) without income tax kicking in. You would probably have to pay yourself a small amount to minimise exposure to HMRC's snooping, but possibly not... as far as I'm aware the rules do not state anything about working for free, for yourself - and I wouldn't worry about the ethics, you're already paying plenty into HMRC's bank account through your day job! Some good information here if you're interested: https://www.whitefieldtax.co.uk/web/psc-guide/pscguide-how-does-it-all-work-in-practice-salaries-and-dividends/