ARTICLE · 03 JUNE 2009

Employee Options Exercised Before 10 April 2003 - Revised HMRC CGT Guidance

CMS Cameron McKenna Nabarro Olswang

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HMRC has changed its interpretation of the capital gains position for shares acquired before 10 April 2003 from the exercise of unapproved options and Enterprise Management Incentive ("EMI") options.

United KingdomTax

Nicholas Stretch

Tair Hussain

Isabel Pooley

HMRC has changed its interpretation of the capital gains position for shares acquired before 10 April 2003 from the exercise of unapproved options and Enterprise Management Incentive ("EMI") options.

The main effect of the revised interpretation is to restrict the employee from having an artificial, additional uplift in his acquisition cost of the shares for capital gains tax purposes which was previously available and which could substantially reduce capital gains or produce valuable capital losses.

The interpretation is relevant for all optionholders who have not yet made use of the additional uplift in a tax return which cannot now be challenged by HMRC.

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