Share option schemes

Share option schemes

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I have a client who works for a Canadian company that granted share options to him in 2008, 2009 and 2010. Some were approved and some unapproved. He also was contributing monthly to his employee share option plan which was approved.

The company were taken over in September 2011  and he was forced to sell all his share options which he had exercised at market value.  The company has added the proceeds of this share options to his P60. Is this correct under ITTEPA 2003 legislation or is it a CGT issue?  My thoughts are that this event was a a chargeable one that PAYE should be applied by the employer.

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By chris.lee99
16th Jan 2013 14:58

My personal point of view

 

This is purely my personal point of view as I have been through a situation with a UK company.

I work for a UK business which was bought a few years ago by another UK company. We were run as a separate company within the group. (The Parent company doing consolidations etc)
As part of the "Group" we could contribute monthly to a share purchase scheme. (They are on the London stock exchange). 
Under this scheme they gave you a number of free shares each month up to a maximum.

Last Year, we were sold out of the group and had an option to "convert" these shares to a personal certificate or to sell them at market value.

I chose to sell them and because they were being sold (some before the 3 years for tax free trading) as part of an exit procedure from the "Group" I was allowed to sell them and not have to pay income tax on them. 

 

I don't know if this would relate to your client, but I would think the same rules apply certainly for the "approved" shares and if they are trading them in the UK.

No doubt there will be someone more qualified than I am, but as stated my comment is based on the fact that I was in your clients shoes so to speak

Hope this helps, and I look forward to see if anybody else comments.

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