26 |
liability under these rules may be excluded if the option comes within chapters 7, 8 or 9—ie approved SAYE option schemes, approved CSOP schemes or enterprise management incentives, discussed below at §§16A7–16A.9. |
It will be seen that section 475 excludes liability whether the option can only be exercised within 10 years or not; the previous law made a valuation distinction here but that is not part of the final 2003 scheme.83 |
Later chargeable events. ITEPA section 476 (section 135 of TA 1988) applies where the option is an employment related securities option.84 The list of chargeable events is (a) the acquisition of securities ‘pursuant to’ the option, ie the exercise of the option, (b) assigning or releasing of the option where the assignment is for consideration and not to another associated person, c) the receipt of a benefit in money or85 money’s worth in connection with the option apart of course from the securities acquired under (a) or the consideration received under (b). |
16A.5.3 Amount Charged |
The taxable amount as determined under the legislation counts as employment income under part 7 of the Act. Normally the amount will be the difference between the price paid under the option, including the price of the option and the market value of the shares acquired under the option—ie the gain less any dedcutible amounts.86 Analogous rules apply to the assignment or release of the option87 and in all cases there are further special deduction rules eg for national insurance class 1 contributions or any special Social Security Contributions paid by the employee.88 Further rules apply where one option is exchanged for another; a form of rollover is applied.89 |