Commentary

C2.1014 Employment-related securities options

Capital gains tax
Capital gains tax | Commentary

C2.1014 Employment-related securities options

Capital gains tax | Commentary

C2.1014 Employment-related securities options

Where an employment-related securities option (as to the scope of this term, see E4.508J) is assigned or released, the charge is to income tax rather than capital gains tax1. Similarly, when an employment-related securities option is exercised, the charge is to income tax (see E4.508J).

The amount counting as employment income on the exercise of a right to acquire shares (the 'taxable amount' for income tax purposes) is added to the consideration for the acquisition of the shares in calculating any capital gain or loss on their subsequent disposal2. Certain amounts deducted in arriving at the taxable amount are added back for this purpose3. These are:

  1.  

    (a)     amounts included in earnings from employment on acquisition of the option under ITEPA 2003, s 62 (see E4.102) or as a benefit (ITEPA 2003, Pt 3 Ch 10 (ss 201–215): see E4.611); this refers generally to long options under ITEPA 2003, Pt 7 Ch 5 (ss 471–487) as originally enacted (ie before the introduction of the employment-related securities options regime by FA 2003) (see E4.514);

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