Income or Capital Gain?
I have a client who obtained stock options whilst employed by a major
There were for a period of at least three years.
He exercised one in April 2010 and placed the funds into his pension scheme,
prior to his retirement in July 2010.
This was therefore taxed as earnings under section 7(2)(C) IETPA 2003 as
this allowed it to be included as relevant earnings for the purposes of
pension relief calculations.
A further option matured in April 2011, by which point he was no longer
My intial thoughts are that the gain on this option should be treated as a
Capital Gain as it was more investment related. There is a potential
difference in the marginal rate of tax between 28% and 50%.
I've looked at the HMRC helpsheets - but they do not offer an answer to
Has anyone come across this scenario before? - if so could you please point
me in the direction of an answer to the conundrum?
Alan Scott FCMA CGMA
A W Scott Accountancy Ltd
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