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Question re exercising warrants & cashless option

Question re exercising warrants & cashless option

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2 years ago I was granted warrants with the company I work for  with an agreed price at which I could purchase shares in the  future.

The company is now being acquired which has triggered all my options to  vest early and I am now  able to exercise them at the agreed price.

The 'sale price' for each of my shares has been agreed in the   purchase agreement with the new company.

I am being asked to click a button in the online portal to exercise my warrants and then  transfer the funds for the  exercising  of my warrants (a not inconsiderable sum to raise at little notice).    

There is also a 'cashless' option which I understand means rather than having to find the funds I will be paid the  difference between the strike price of my warrants and the sale price.

My question is, are there any differences in how the revenue I receive  with either option is treated from a tax perspective?  Are both just simple CGT declarations or is one or the other (or both) subject to any income tax or NI contributions?

All sales agreements are signed and binding, the sale just has to go through the French anti-trust approval before a completion date is agreed so also worth knowing if I should wait to exercise options/transfer funds until we have that date .

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By David Ex
02nd Aug 2021 14:25

I personally wouldn’t undertake a transaction involving “a not inconsiderable sum” without taking tailored professional advice from an accountant.

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