Commentary

C2.806 Quoted share options

Capital gains tax
Capital gains tax | Commentary

C2.806 Quoted share options

Capital gains tax | Commentary

C2.806 Quoted share options

This article describes the treatment of transactions involving quoted share options; the treatment of options generally is described in Division C2.10.

A quoted option means an option which, at the time of its abandonment or disposal is listed on a recognised stock exchange1. A quoted option is not a wasting asset2.

The issue by a company to its shareholders of an option to subscribe for shares in the company is not a distribution because it is a disposal of an asset3 and does not in itself constitute a reorganisation.

Provided certain conditions are satisfied, where a quoted option is issued at the same time as a reorganisation, reduction, conversion, exchange or reconstruction4, the option is regarded as the shares which could be acquired by exercising the option5. By concession, HMRC used to

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